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ONE-TIME HIGH-FLIER SHEDS MONEY-LOSING HUBS TO FOCUS ON MARKETING ENTERPRISE SOFTWARE
In the dot-com era, Verticalnet Inc.'s e-marketplaces came onto the b-to-b scene with a bang. Earlier this month, Verticalnet shed those same e-marketplaces with a whimper.
On July 1, Malvern, Pa.-based Verticalnet Inc. announced the sale of its Small and Medium Business Group, the company's group of 59 vertical e-marketplaces, to Erie, Pa.-- based Corry Publishing for $2.35 million in cash, plus a potential $6.5 million more over four years, based on performance.
The acquisition price is remarkable, considering the nearly $11 billion market capitalization Verticalnet reached in 2000, just before the dot-com crash. At that point, the company's business model was focused almost exclusively on those e-- marketplaces, and their supposedly bright future accounted for the high market cap.
Now, just two years later, Verticalnet's strategy in unloading its e-- marketplaces is clear. Its original business model didn't prove viable, and its market cap has plummeted to $19.5 million.
The divestment of the e-marketplaces generated cash from a negative cash flow business, and it allowed Verticalnet to focus on its new business model of selling enterprise software.
Corry keeping quiet
Corry Publishing's strategy is less clear. The privately held company declined...
