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BellSouth teams for e-commerce marketplace

The local phone provider forms a joint venture with Commerce One to build an electronic marketplace to help the Baby Bell cut procurement costs by $1 billion.

    Local phone provider BellSouth and e-commerce provider Commerce One plan to build an electronic marketplace to help the Baby Bell cut procurement costs by $1 billion.

    BellSouth and Commerce One will each hold a minority equity stake in the new company. Eventually, the marketplace will be open to all telecommunications companies and their business partners to manage purchases, or report and track any product or equipment buy.

    Participants in the marketplace will be able to earn equity in the venture based on how much they use the site. Firms will also share responsibility for establishing the direction of the site, executives said. The marketplace is scheduled to launch during the second quarter of this year.

    US West also planted a flag in the Web procurement world today, taking a small stake in online commerce firm Vsource. The two companies plan to offer businesses the ability to set up "electronic exchange" communities, where companies can connect with, and order products from, suppliers.

    A growing number of companies are working to build trading exchanges or marketplaces that connect suppliers, partners and customers online.

    General Motors, Ford, Dupont and Chevron have all recently announced intentions to participate in an online marketplace. Partners such as Commerce One, Ariba and Oracle, which make software that allows firms to buy and sell everything from office equipment to services online, have partnered with some of the larger firms to help support the e-commerce push.

    Over the past two years, Commerce One has forged a number of partnerships with telecommunications companies, including British Telecommunications, Germany's Deutsche Telekom and Japan's Nippon Telegraph and Telephone (NTT), to build marketplaces similar to BellSouth's current project.

    The new marketplace is part of BellSouth's overall strategy to shift its buying needs to the Web, BellSouth executives said. Overall, the local phone firm spends some $16 billion annually on procurement costs.

    Last year, BellSouth announced that it would build Web sites small businesses would use for trading, based on Commerce One's MarketSite portal.