January 19, 2001 -- Although it might seem like a blessing by comparison, coming as it does the day after Vignette's market woes, VerticalNet and Metiom have both announced layoffs and restructuring.
In making the announcement, VerticalNet gets extra spin credit, since the release containing the bad news was headlined VerticalNet Aligns Work Force With Strategic Priorities. We won't know for sure until we get a ruling from the judges, but workforce realignment may be a new record in the Lamest Euphemism category. About 150 employees, 8.3 percent of the company's regular full-time workforce, will soon be seeking alignment with another company. VerticalNet will report fiscal 2000 financial results in February.
Metiom (mee-tee-um, in case you're wondering) announced good news with the bad. The good news is that it has secured $45 million in new, private funding. The bad news comes right after that, though, as the company is accelerating its pace on the path to profitability by instituting strategic cost-cutting measures and a staffing reorganization. Guess workforce realignment was already taken. Metiom is slimming employee rolls even more than VerticalNet, cutting 20 percent of its staff.
There may be hope on the horizon, however. Chris Wagner, Metiom's president and CEO, said, While others may be focused on merely surviving, our intent is to be a leader in our sector. Metiom's business model of working with large companies to bring small and medium-sized companies into the e-commerce arena is being broadly validated. Couple that with strong investors like Forstmann Little and profitability by Q1 2002, and you've got the formula for e-commerce success. As the B2B winter thaws, only a few B2B companies in our particular space will be standing, and we believe one of them will be Metiom.
Such optimism may be more than just the work of someone with a vested interest in the company. Michael Tarnopol, vice chairman of Bear Stearns, observed, Metiom is structuring itself to be fit and trim, and that is healthy. Astute investors like Forstmann Little understand that success comes to those who stick with a good business model."
All is not gloomy on Wall Street when it comes to B2B companies, however. Commerce One announced losses of of $10.8 million, or five cents a share, for fiscal year 2000, beating estimates of seven cents a share. And there are some seriously glossy numbers behind those figures. Revenues for the current quarter totaled $191.4 million, as compared with $16.9 million for the corresponding quarter in 1999 and $112.7 million for the quarter ended Sept. 30, 2000. This is an increase of 1,033 percent over revenues for the quarter ended Dec. 31, 1999 and 70 percent over revenues for the quarter ended Sept. 30, 2000. Revenues for the full year 2000 were $401.8 million as compared to 1999 full year revenues of $33.6 million, an increase of 1,097 percent.
Wall Street jumped on Commerce One stock following the news. The stock closed up 29.25 percent for the day.