BackWeb Sees 2000 Sales Almost
Doubling on E-Commerce Growth
BackWeb Sees 2000 Sales Almost Doubling on E-Commerce Growth
Ramat Gan, Israel, Sept. 28 (Bloomberg) -- BackWeb Technologies Ltd., a maker of software allowing business executives to
flash video messages to employees through the Internet, plans to almost double sales by the end of 2000 as electronic
commerce expands.
The San Jose, California-based company is spending about 80 percent of revenue on boosting sales to establish its software as
a standard for Internet business communication. BackWeb said it's already used by companies such as U S West Inc., Compaq
Computer Corp. and Cisco Systems Inc.
As traffic grows on the information superhighway, company messages risk getting lost in a flood of electronic mail and files.
With U.S. business spending on Internet products forecast by International Data Corp. to more than double in the next three
years to more than $203 billion, BackWeb wants to ride the growth by helping companies better electronic management of
staff. ''Sales people, for example, may not have the time or the patience to download files or to read e-mails, because they
probably have hundreds,'' said BackWeb Chief Financial Officer Hanan Miron.
BackWeb's software gets around this, said Roni Or, vice president for product development. A BackWeb software-created video
message downloads automatically and pops up on the screen of the recipient, who doesn't have to stop what he or she is doing.
In addition to distributing multimedia messages, BackWeb's software helps companies like Hewlett Packard Corp. improve
customer service by enabling them to send product updates to clients en masse.
Payoff
''The payoff is huge down the road, considering the amount of business activity that will take place on the Internet,'' said Elliot
Prince, an analyst at Wit Capital Corp., which rates BackWeb ''outperform.'' ''For the senior manager, where information flow
is mission-critical, it's an easy sell for anyone who realizes the pitfalls of e-communications.''
After raising $66 million in a June initial public offering on Nasdaq that priced company shares at $12, BackWeb's shares
soared to $35 in mid-July. In the last two months, the shares have retreated, closing yesterday at $17.
The BackWeb share offer marked the second Internet success for Jerusalem-based BRM Technologies Ltd., which invests in
Israeli start-up companies. BRM, headed by BackWeb CEO Eli Barkat and his brother Nir, also backed Israel's Check Point
Software Technologies from its founding.
For now, BackWeb, which conducts research and development in the Tel Aviv suburb of Ramat Gan, is focusing on adding to its
products, and securing leadership in the market for business Internet communications.
Alliances with software makers like Microsoft Corp. and Baan Co. NV, as well as Deloitte Consulting help BackWeb gain wider
acceptance and meet analyst estimates for sales to rise to about $38 million in 2000 from about $20 million this year.
Last year, the company had $9.5 million in revenue, while losing $14.8 million. BackWeb's loss should halve this year, and
the company should start breaking even by the end of 2000, according to analyst forecasts.
Grabbing market share quickly will help fight off potential newcomers, analysts said. Marimba Inc. competes with BackWeb in
providing software updates to customers, though this is only one application of BackWeb's system. ''You have to assume
(competition) is out there,'' said Prince. ''I'd be surprised if BackWeb had the market to themselves for the next three years.'' |
