VerticalNet Out to Prove It's a B2B Play
By Joe Bousquin
Staff Reporter
9/6/00 2:56 PM ET
SAN FRANCISCO -- VerticalNet (VERT:Nasdaq - news) says it's getting serious about B2B.
"We've made a distinct decision to push more seriously into our B2B strategy with investors," Blair Lacorte, VerticalNet's senior vice president of strategy, said Wednesday at the Robertson Stephens Internet Conference here. (For a conference calendar, click here.)
That meant the jokes about SolidWaste Online and AdhesivesAndSealants.com, two of the company's industry-focused Internet communities, were gone from the company's presentation. Instead, Lacorte emphasized that VerticalNet is a business-to-business company focused on the spot and open markets, which entail buying and selling goods on an as-needed basis, instead of through a prewritten contract. Through its 57 vertical communities, Horsham, Pa.-based VerticalNet tries to generate sales leads for companies that want to sell into this market.
Lacorte said that the company's more button-down tone resulted from the recent addition of Joseph Galli as CEO. Galli, a former Black & Decker (BDK:NYSE - news) executive who made a high-profile defection from Amazon.com (AMZN:Nasdaq - news) to join VerticalNet, succeeded the flamboyant Mark Walsh, who became the company's chairman. But like the jokes, Galli was absent from the company's session.
Because investors are scrutinizing B2B stocks more intensely, Lacorte said VerticalNet was all business about B2B.
"Early on, I think, we were riding the wave in B2B," Lacorte said. "Now, the questions are getting a lot tougher, which is actually good for us. People now are looking for more than just growth. They're looking for a defensible business model."
VerticalNet has taken its share of dings: Its electronic components exchange, NECX, accounted for more than half its revenue last quarter. But that exchange is really an offline brokerage house for computer chips and components, not the online type of exchange that B2B firms are pushing for. So some analysts have questioned whether VerticalNet deserves the highflying valuation of a true B2B company.
Lacorte said that more and more of the NECX business is going online, and investors shouldn't just look at the business where it stood when VerticalNet acquired it last year.
"I think what you're going to see now is a consistent and massive movement online," Lacorte said. "You've got to look beyond what it was when we bought it."
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