Analysis: E-commerce software vendors continue sales slump

I2 Technologies Inc. and Commerce One Inc., both software vendors specializing in the electronic commerce market, have reported rapidly falling revenue for recent quarters, driving them both into loss-making territory.

I2's second-quarter revenue this year reached US$120 million, less than half that of the year-earlier figure of $249 million, the company announced Tuesday.

This led the supply chain software vendor to post a net loss of $77.8 million before special charges and to take an immediate decision to lay off 1,400 employees, about 30 percent of the workforce.

Commerce One announced Wednesday that its revenues had fallen 73 percent to $27.8 million in the second quarter from $101.3 million for the same quarter one year ago, leading to a net loss before charges of $38.4 million.

Commerce One develops software to link vendors and buyers over the Internet, a market it briefly had almost to itself before major software vendors such as Oracle Corp. and PeopleSoft Inc. began to invade.

Both Nasdaq-listed companies were strongly valued at the height of the dot-com boom. Shares of i2 (Nasdaq: ITWO) reached a peak of $110 in March 2000, but are currently valued at $1.37. Commerce One (Nasdaq: CMRC) reached an all-time high of $128.78 in December 1999, and is currently valued at $0.65.

Customer service software maker Siebel Systems Inc. also announced Wednesday a 28 percent revenue drop for its second fiscal quarter of 2002, and plans to lay off 1,200 staff. Siebel's stock (Nasdaq: SEBL) peaked at $119.85 in October 2000, and has fallen to $11.74 now. Business-to-business software specialist Ariba Inc., which saw first-half revenue drop from $254.8 million in 2001 to $112.4 million in 2002, will announce its third-quarter results next week after earlier declaring that its revenue slide is over and that the company will break even for the current quarter. In March 2000, Ariba's stock price (Nasdaq: ARBA) peaked at $333 before a two-for-one stock split; the stock is now valued at $3.26.

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