Commerce One refocuses on products
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Commerce One has sold off its e-marketplace operations to US-based eScout, one of its partners and customers.
20 December 2002 Business-to-business (B2B) procurement software vendor Commerce One has sold off its e-marketplace operations to one of its partners and customers, the US-based eScout e-marketplace.
The move is the latest in a series of restructuring measures at the once high-flying software company. Mark Hoffman, Commerce One's chairman and CEO, said the sale of the company's e-marketplace services operations, known as Commerce One.net, will enable the software vendor to focus on its core web-based B2B procurement and integration software.
The sale comes just over a month after the company said that it had secured a $25 million (€24.7m) loan facility and had cut 350 jobs in a bid to stem its ongoing losses.
Analysts say that Commerce One will now be free to concentrate on selling its software, where it faces intense competition from larger rivals such as former partner SAP.
The merger of eScout and Commerce One.net, which is used by 40 buying organisations and 1700 distributors and suppliers, will create North America's biggest horizontal e-marketplace, say Hoffman and eScout CEO Sandy Kemper. As part of the deal, Commerce One will get an increased stake in eScout. Full details have not yet been disclosed.
Services accounted for almost 70% of Commerce One's revenues during its last financial quarter to the end of September. An undisclosed portion of the transaction-based revenues will now be transferred to eScout.
Commerce One's software licence revenues are falling rapidly as a development and resale partnership with SAP comes to an end. In the third quarter, SAP paid Commerce One $8.1 million (€8m) in software royalties.
Despite booming during the late 1990s with its 'e-marketplace' technology, Commerce One, along with similar B2B software rivals, has been struggling to keep its revenues from falling. In 2001, it recorded a $2.58 billion (€2.54bn) net loss. In the third quarter to September 2002, net losses were $46.9 million (€46.3m) on revenues of $26.4 million (€26.2m). At the end of September, the company had $110.7m (€109.7m)in cash.
Executives say they are confident that the restructuring and new focus will enable Commerce One to reach break even in late 2003.
