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Walsh: VerticalNet May Consider Taking Properties IPO

Yesterday, I released Part I of a interview with the president and chief executive officer of VerticalNet (VERT), Mark Walsh.

In Part II, Mark discusses VertcalNet's progress to date, as well as plans for the B2B "portal" going forward, as well as VerticalNet's focus on creating more transaction oriented, e-commerce revenues. I also asked Mark if he planned to IPO any of the company's individual verticals.

Don't let the name throw you off. Unlike the majority of business-to-business commerce companies that attack a single vertical industry, VerticalNet is actually a horizontal B2B "portal" for 53 individually branded vertical communities. The communities represent a broad cross-section of vertical industries. DigitalBroadcasting.com, DairyNetwork.com, and Pollution Online are examples, among the 50 others.

Reporter@Large: OK Mark, lets get to the juice

Walsh: Lets do it.

Reporter@Large: Investors, including myself, read the profiles of some of these companies and I think we end up even more confused. There is just so much commercial jargon. Can you tell us what VerticalNet is really about?

Walsh: Yeah, I'm with you on that. I think the terminology gets so thick, so quick. It really slows down the appreciation of some of the cool things going on.

Reporter@Large: So how cool is VerticalNet? (laughs)

Walsh: VerticalNet was founded 4-1/2 years ago, really as a media model business bringing trade publishing to the Internet. Now we are a portfolio play, serving multiple markets, targeting a distinct audience of industrial buyers and suppliers, and in some cases, technology buyers and suppliers. We wrap a series of information, contextual content and commerce services around each of our 53 communities. Buyers and suppliers find a lot of value in our audience, in our technology, and in our ability to sell their things.

Reporter@Large: And the selling?

Walsh: Selling to me is about new and used/excess. Picture four boxes with, one-to-one new, one-to-one used, one-to-many new and one-to-many used. We have products to service those four boxes for each of our communities, because that is how we see buyers behaving.

Reporter@Large: Can you give us some examples?

Walsh: Sure. A 1-to-1 event occurs when a buyer of pinch valves comes to our "Pollution Online" vertical. They want to browse through multiple sellers, find one that has what they want, reach out to that vendor, leave a sales lead, or actually buy on our "vert." That is one-to-one.

One-to-many is where a buyer comes to one of our verticals and says, "I'm looking for a pinch valve that is made of aluminum, corrosive resistant, high capacity and is available in a week." Having multiple vendors searched and finding a number of pinch valves that solve the parameters of that buyers' search, the options are presented to the buyer and they can then make a decision.

Reporter@Large: What about VerticalNet's commerce expansion?

Walsh: What you'll see from us in Q1:2000, through our purchase of Isadra Software is much like you see in the Commerce Ones and Aribas of the world. . .the ability for a buyer to source multiple vendors and buy, online, in our vert, the products that make sense for them.

Reporter@Large: A lot of people point out the complexity and dificulty of launching one B2B vertical, let alone 53. There has to be some cross-networking leverage, or else such a strategy wouldn't make sense.

Walsh



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