VerticalNetHussain Amin Ismail

Lai Carey Hwang

Parmar Sanjeev Singh

Samudrala Avinash Gopal

Tse Wai Hung, Michael

Topics

• History of VerticalNet

• Competitive Landscape

• Resources and Capabilities

• Strategy

• Recommendations for the Future

What is B2B?

• Shoppers are Businesses not Consumers

• Shift Procurement Online with IndustrySpecific Interests

History of VerticalNet

•First Mover Advantage

•Investors are Key Internet Players

•Mutual Fund of Verticals

VerticalNet

• VerticalNet Markets– 57 industry-specific VerticalNet Marketplaces

supporting commerce, content and community

• VerticalNet Exchanges– VerticalNet Exchanges focus on direct material and

OEM component exchanges

• VerticalNet Solutions– VerticalNet Solutions deliver the most comprehensive

digital marketplace solutions available

VerticalNet’s Main Competition

Ariba

• Leading provider of B2B solutions and services to leading companies around the world

• Serves more than 40% of Fortune 100 companies• Allows companies to build B2B marketplaces,

manage corporate purchasing, and electronically enable suppliers and commerce service providers on the Internet

VerticalNet’s Main Competition

Free Markets, Inc.

Company’s Concept

scour the globe for suppliers of anything from coal to printed circuit boards

Reverse Online Auction suppliers compete in real time, lowering their prices

until the auction is closed

Commerce One

Offers comprehensive mix of e-business solutions and professional services

• Global Trading Web™– A network of interoperable

marketplaces, trading communities, and commerce portals

• Commerce One.net™– provides the technology and

business services that allow these global trading partners to work together

B2B.Yahoo.com

• Searches Many of the Business to Business Commerce Sites

• Allows Consumer to – Compare products

quickly– Find prices– Select a transaction

format (auction or fixed price).

Intangible Resources and Capabilities

• Brand-name- Inspire trust–Industrial markets based on relationships and trust amongst participant

• Strategic alliances and acquisition–Traditionally fill resource gaps with alliances or acquisitions

Intangible Resources and Capabilities

• Management Capability and Strategy–Led by professional management, with good reputations within the industry following a strict expansion policy

• Market Information–Access to valuable real-time, and voluminous market data

• Network Externality– Value of Vertical Net’s community’s rises as more

participants join

– Can charge higher advert rates, as well as generate more saleable market data

Intangible Resources and Capabilities

HR. Resources and Capabilities

• Marketing Staff– Experienced staff capable of generating advertising rev

enues

• Content Providing Ability– Attracting users, building a community

Resource Gaps: Expanding E-commerce

• Need to be augmented and refocused

• Need to make alliances to secure necessary software, and secure payment

• VerticalNet has always filled resource gaps by establishing alliances

• Storefront Advertising Rates– Maturity of Vertical Trade Community

– Number of storefronts

– Amount of advertising purchased

– Length of advertising contract

• Average Storefront Price– $7,000 to $8,000 per year

Current Revenue Sources

Future Revenue Sources

• Advertising Parameters– Number of sales inquiries generated

– Visitors sent from communities to advertisers’ web sites

Future Revenue Sources

Renting space

&

Charging for ads

% of the transactions

Future Revenue Sources

• Recent Feedback– Higher Level Storefront

• E-commerce center

• $15,000 per year

– Facilitation of E-commerce• 20% of interested buyers

– Purchased within 6 months

– Average transaction amount: $25,000

Transitioning Revenue Streams

• Currently– small and mid sized manufacturers

– purchase retail and advertising space

• Future– Selling e-commerce solutions

• selling to CEOs, CIOs, MIS professions

• Technical issues of conducting e-commerce

• High-ticket items

Recommendation

• “Doing More of the Same?”– Content focus

– Sponsorship

– E-commerce

• “Doing More Than What We Currently Do?”– Advertising

– E-commerce

Recommendation

• Doing More of the Same– Storefront

– Advertising

– Content Focus• License Content

• E-commerce?– As industry develops, so will sources of

revenue

?Q&A?

Big Hands

Thanks