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To: craig crawford who wrote (93317)	2/10/2000 11:17:00 PM
From: Glenn D. Rudolph	Respond to of 164684

"B2B eCommerce Update - Eric B. Upin - eric@rsco.com VERTICALNET'S ADEPT EXECUTION VerticalNet is carrying out its business plan energetically, expanding its market through acquisitions and partnerships while building advertising and commerce revenue, its portfolio of sites and its technology platform. The following recent developments demonstrate VerticalNet's adept execution, in our view. * NECX acquisition. VERT closed the deal on December 16 and is beginning the integration process. NECX brings 18,000 suppliers, 1,400 customers and well developed logistics and distribution capabilities to the table, representing a big step in building critical mass in the electronics vertical. * Microsoft pact. The software leader made a $100-million equity investment in VerticalNet and signed a $150-220-million deal to buy storefronts and sponsorship advertising over the next three years. We believe this deal amounts to the most powerful endorsement of VerticalNet to date, bringing Microsoft's brand and thousands of its customers to VerticalNet sites while adding substantial recurring revenue. * Joint venture with Softbank. This agreement establishes B2B vertical communities for the Japanese market. * Joint venture with British Telecom. This alliance aimed at pursuing B2B opportunities marks VerticalNet's first significant move into Europe. VERT, BT and Internet Capital Group invested $107 million, with VerticalNet contributing $7 million while gaining a majority stake in the venture. We expect the relationship to enable VerticalNet to tap into BT's communications network and vast customer base across Europe and Asia. * 2-for-1 stock split effective March 31 for shareholders of record on March 17. We believe VerticalNet represents a compelling way to play business-to-business eCommerce, and the story continues to improve. In our opinion, its strengths include early-mover advantage, an excellent portfolio of sites, strong management and a dynamic ability to target new opportunities. However, as much as we like the company, we believe its recent accomplishments are largely priced into the stock at this time; it has appreciated 465% and added $7 billion in capitalization since October 1. VERT went public last February at $8 with a $250-million market cap. At a valuation of $8 billion today, the stock has had a great run, and therefore we believe the near-term upside is limited. "