VRTY is 6 months into a turnaround. Since Gary Sbona took over as CEO last summer, he has been focusing on core technology and products, trimming expenses and unwinding unwise acquisitions and projects that were not likely to provide a return on investment any time soon. He also brought back top sales exec Anthony Bettencourt, who had guided Verity through it's initial revenue growth phase in 1995-96.
I think that the Lotus and Netscape announcements this week only emphasize that Verity is being run as a rational business. The price has been supressed for so long due to the company's poor performance and doubts about management. The performance is rebounding nicely and Sbona has quietly gone about erasing the mgmt issues--not with press releases, but with getting the job done.
By the way, while this turnaround has gone on, Verity's primary competitor, FULCF has faltered badly and was recently acquired by PCDOCS. With over 10 years of R&D invested in sophisticated and useful search solutions for corporate enterprises, and over 200 OEM's (like Lotus and Netscape) that have embedded Verity's base search engine inside their own apps, VRTY has an excellent opportunity to be the backbone search platform for many sophisticated corporate and internet apps. This is totally different from the common use of the term "search engine", which has come to denote Yahoo, Lycos, Excite, Hotbot, etc. Those services are great for casual users and consumers to find stuff on the web. What Verity has is a collection of sophisticated search tools and connectors that run on nearly all platforms, and this stuff is mature and been out there in production for many years now. They've got a blue-chip customer list already such as AT&T, IBM, HP, SAP, KPMG, Ernst& Young, Cisco, Compaq and lots of govt. agencies.
VRTY got sidetracked chasing too many diverse opportunities, including shrink-wrapped consumer apps. Now that Sbona has got co. re-focused on core corporate and internet tools/solutions market again, look for continued rebound, growth and profits. |
