Once again, it is important to point out that Ariba and others have created demand where none existed before making it much more difficult to draw a conclusion as to which company competes with which. Is it a gorilla game or is it a godzilla game? I would caution the gorilla game tactic of buying a basket of stocks targeted at exactly what Ariba's product does. The only way to buy a basket at this point would be to pick up shares of Ariba, Commerce One, Concur, Elco, Oracle, SAP, Netscape(AOL), Clarus, Peoplesoft and JD Edwards to try and cover all the bases. That's a little too broad and pointless at this junction. Things are moving too fast and the 'buzz' seems to be that the Ariba product is superior to the Commerce One product. Sure, the B2B market is going to be huge. There will be many products and many players. They are creating demand where it didn't exist before. That's the difficult part about it all. In the meantime, the list of clients is growing before our eyes at Ariba. The revenue growth is, as I said, insane. The partnerships and alliances are powerful in the industry. It's moving fast - really fast.
I am personally using the DoubleClick analogy of how things have been working out in that business. If one bought an early basket at the beginning of that 'swirl' what did you end up with in the end? DoubleClick. I'm not saying there are not other players from various fields in that business, but DoubleClick is the clear leader and getting stronger through its product line and acquisitions.
The initial investors own 60 percent of Ariba. The 6 co-founders are all still there. It is a very experienced team we are talking about here. Not a garage start up of college kids. They are also very Wall Street versed. I, personally, wouldn't be surprised to see some deals as we go from here on out over the next couple of years - a la DoubleClick. It is all moving fast and that pace will not slow.
One could view the time period where initial investors can sell as an event or as a non event. I prefer to go with the latter.
Where is the Ariba product in the technology life cycle? If you look at the list of clients, alliances as well as listen to all the buzz in the industry about B2B and Ariba - then throw in the element that at least one huge customer tossed the Commerce One product and switched to Ariba lately. What conclusions can we draw? It's moving fast. It's not a secret. At the point we all even started looking at this business I think the chasm was long ago (in today's fast paced market) leaped over and the tornado has been adding all these customers and clients before our eyes. However, I'm leaving that open at the moment and don't want to jump to any conclusions.
I harken back to the CEO's appearance on CNBC when the questions being asked were hard to find because we are talking about a virgin business here. One that was created and there is nothing to compare it to in the past. That's why they had trouble finding questions to ask and all were left scratching their heads at the end. That was a clue to me that even though we are moving fast, it certainly isn't on Main Street yet.
BB
(Who didn't know enough where to start or what to take positions in. I went with ICGE and ARBA in my IRA accounts to avoid any tax consequences should I need to make some quick adjustments. Watching ARBA run from a little over 100 to 198 confirmed for me that the day traders know about this one in spades.)
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