Verticalnet: Execute or Die

For the sake of customers -- and prospects -- it's good to see Verticalnet hanging on these days, getting an additional cash infusion. But despite having a strong product suite and supporting services -- ranging from one of the most complete visibility solutions in the market through to supplier performance management -- Verticalnet's financial performance has gone down faster than Bush's approval rating in recent quarters (Debbie Wilson graded it an "F" in fact). Let's hope this cash infusion and reverse split is enough to get them back to a sustainable financial position where they can continue to serve customers and reach new ones. I'd wager this is Verticalnet's last chance to get it right, or someone else will pick up the IP and customer list.

The great irony of Verticalnet these days is that their solution set is the opposite of smoke and mirrors, yet they can't seem to get the top-line in order. If you believe the current listed Yahoo headcount number of 136, Verticalnet's current run-rate (if you take last quarters revenue and multiple by 4) is around $100K per FTE, a number 1/3 to 1/4 what it should be for a sourcing and supply management consultancy (and software should be an even higher margin business). The bottom line is that it's time for Verticalnet to execute. I know the results, products, expertise, and references -- unlike some other providers who will go unnamed -- are there. But they've got to put it together soon, or it will be too late, and Verticalnet's rich IP and expertise will be become lost in a broader provider's solution set.

Jason Busch

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