RealTime IT News

VerticalNet Nearly Finished With Facelift

There's a new president and chief executive officer handling the day-to-day activities of retooled VerticalNet Inc. , a company that spent most of 2001 shedding unprofitable divisions from its operations and finding a new business model.

The changes come just as the company gets ready to show off its new look to investors and the business world after completing it's metamorphosis to a enterprise software and outsourcing specialist.

Kevin McKay, one of VerticalNet's board of directors and former SAP America chief executive officer, is now president and chief executive officer in place of Michael Hagan, who's been acting chief since the noisy defection of Joseph Galli in January 2001.

"Having actively served on the VerticalNet board and audit committee, I am familiar with the company's strong management team, impressed by its unique technology assets, and excited about the opportunity to extend my contributions by taking charge of a company so clearly positioned for growth," he said.

Hagan, a VerticalNet co-founder, assumes the board of director's chairmanship, replacing Mark Walsh. Walsh (the other co-founder) will remain on the board, but in a diminished capacity; he plans to spend more of his time as chief technology officer for the Democratic National Committee.

In related news, Horsham, Pa.'s VerticalNet last week installed John Milana, former Atlas Commerce chief financial officer, as its new CFO. Verticalnet acquired Atlas in December 2001 to fulfill the company's goal of becoming an enterprise software company capable of outsourcing its applications.

Tuesday's news signals the last phase in the company's nearly universal facelift from a year ago, when it's high-profile chief executive officer fled nearly two weeks before the world found VerticalNet would cut staff and restructure.

Hagan took over daily operations and has been quietly retooling his company's image. Immediately cutting 150 "redundant" jobs, mostly from an overlap in responsibilities created thanks to 22 acquisitions in two year, he also announced the company's intention to streamline operations and to become an enterprise software provider.

Almost immediately, VerticalNet secured deals pleasing to investors, though revenues gains were marginal in 2001 ($125.6 million in 2001, up from $112.5 million in 2000).

The small- to medium-sized business unit division was sold off to pay for expenses, while VerticalNet got to work acquiring Atlas Commerce, which was finalized in January for $24 million.

According to Hagan, he is happy to hand the reins to McKay, a 20-year software industry veteran and the perfect man to bring Verticalnet to the next level.

"With our recent acquisition of Atlas Commerce and the proposed sale of our SMB unit, VerticalNet is entering into the final phase of the business transformation I put in place almost two years ago: to successfully leverage this company's most powerful assets to become a leading collaborative supply chain software provider with a brand-name clientele and a high growth trajectory," he said.