Several months ago, while at Internet World, I had a chance to meet up with
Samir Arora. Of course, we talked about his company,
NetObjects, as well
as the plunge in valuations of the Net sector.
Yes, NetObjects was on the Net roller coaster. In the past year, the stock
hit a high of $45-11/16 and a low of $1-1/16. Currently, the stock is at
$1-5/16 and the market cap is $40 million.
Despite the stock price, NetObjects is continuing to focus on its core
strengths. And big companies are paying more than lip service. Take Dell
Computer. In a recent agreement, Dell will preload NetObjects Fusion Web
site building software on Dell PCs. Basically, this will make it much
easier for small and medium-size businesses to go digital. Yep, the
NetObjects Fusion logo will be on the desktop (on the Dell Dimension and
Inspiron notebooks).
But there is more. You see, NetObjects purchased MyComputer.com, which was
already a part of Dell’s small business Net services. MyComputer.com is an
application service provider for the management of Web sites. There are
more than one million members.
In other words, NetObjects will be the primary source of Web site solutions
for small and medium business for Dell.
In terms of the financials, NetObjects generated revenues of $5.4 million in
the past quarter, compared to $5.8 million in the same period last year.
Why the decline? Well, the company has shifted its business model away from
one-time, up-front licensing to a long-term monthly subscription model. “We
get paid a percentage for every small business subscriber that uses our
services,” says Arora.
NetObjects has also recently introduced a new product called Matrix. It is
a set of online services that will be distributed through business service
providers. In order to allow for scalability and interoperability, the
solutions are based on XML and server-side Java. There is even support for
handhelds and cell phones. With Matrix, companies have access to customer
interaction services, marketing, reporting, B2B marketplaces, and
scheduling.
No doubt, the small business opportunity is huge. Small businesses account
for about half of the U.S. economy, but less than one percent of online
business. But this is expected to change soon. And NetObjects has the
complete solution to make this happen.
“The Internet software industry is going through a major change from
licensing to a long-term monthly subscription model,” says Arora. “Simply
put, NetObjects’ goal is to transform itself to the leading B2B
infrastructure e-services supplier to partners that are targeting small
business.”