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Technology Stocks : VerticalNet, Inc. [VERT] -- Ignore unavailable to you. Want to Upgrade?

To: craig crawford who wrote (511)	11/17/1999 12:34:00 PM
From: Lizzie Tudor	Respond to of 1094

I think the problem with Harmon on this b2b topic is that he doesn't have any direct experience with automation of this type. The difficulty of automating purchasing in somebody's supply chain is too great to justify for a lot of goods... and issues even exist for the high volume items... if you have a purchasing schedule that comes from your ERP that says you need 10,000 SKU WB123456 from Intel, and Intel changes the SKU to WB123456a (which they do all the time to deal with their own inventory) - you're screwed. There is a company dealing with this issue (agil) but these are things that need to be chipped away for now, Commerce and Ariba are doing that, "chipping". Even an About.com in a particular industry (which is what Harmon says vert is) is a huge improvement over what is there now... basically nothing. And there are always going to be those things you choose not to automate, Vert can take those. I do agree with Harmon that C1 is the innovation leader, however (vs Ariba - I think he believes that).

To: craig crawford who wrote (511)	11/18/1999 2:53:00 AM
From: brian z	Read Replies (1) \| Respond to of 1094

From Steve Harmon Smart Money called me yesterday to ask about business-to-business hubs. Hot or not? The notion was that portals for business could be a big next wave. A few IPOs come down the pipeline. The B2B hub notion drives VerticalNet (VERT) to a $3.54 billion market cap. But for what I think is a better B2B approach, if you're looking for the eBay of B2B I believe Commerce One could be it. VerticalNet's approach attacks industries as if content matters, usimg the trade magazine as metaphor. Lure. The weakness in that approach I believe is that most business doesn't need a content wrapper to create a market. Products and services create markets on their own without a front-end with a human intervening. VerticalNet is the About.com (BOUT) of industries. So the better B2B play? market makers in B2B direct, computers talking to computers, matching buyers and sellers without a information layer. And the one stock I like more and more... Commerce One (CMRC) has been a company I've liked since the stock traded under $30 per share in August. Those that listened are happy. Now CMRC shares trade north of $300 as the promise of business-to-business commerce emerges. 10x in 3 months. That's the value of seeing these companies for what they are. Category definers, better than category killers. Time to take profits? CMRC hasn't matched rival Ariba (ARBA) in cap yet and I think Commerce One's service model may be superior. I'm always a fan of taking cost basis off the table but also believe the vision for B2B commerce market making looks huge. It makes eBay look small in 3 to 5 years, relatively speaking. Commerce One provides supply-chain management. With its buysite and marketsite products Commerce One offers clients including General Motors, Bass PLC, Siemens, the linking of buyers and sellers in ecommerce markets. To me that universe is exponentially larger than eBay. Commerce One at $7.7 billion market cap and revenue for the nine months ending 9/30/99 hitting $16.7 million fundamentals won't get you there on potential valuation. However, revenue for the nine months handily beat the $1.5 million for the same period in the prior year. Net loss reached $35 million vs. $17.3 million, respectively. I think the proper way to see CMRC is as the B2B way of market making solutions, basically ecommerce enabling. I also believe that B2B is a 10-to-1 larger opportunity than the business-to-consumer space that eBay holds. Yes, eBay's metaphor for market making differs from Commerce One but that's exactly how it should. Consider that the consumer needs a browse and buy experience such as eBay. Businesses need an automated order fulfillment system and order flow solution. Both match buyers and sellers but the B2B side requires more scaleable solutions. Think parts, not antiques or art. B2B market making centers on specs, procurement, just-in-time manufacturing. B2C market making relies on entertainment and price. So it is my investment thesis that a B2B solution may fundamentally provide similar exchange yet requires a different interface and approach that Commerce One provides. Not a portal model, an integrated supply-chain system that's invisible for how it matches buyers and sellers. The value comes in the exchange not the brand. So while most of the world looks for a portal or hub play in B2B that's probably not the model for scaling to the opportunity. Distributed, seamless automated solutions probably are. Net net I think that bodes well for Commerce One as a better than eBay company if it can keep rolling out the large clients. Not hubs but lifeblood of ecommerce. If that continues CMRC could be better than an eBay to own longer term.