2. VerticalNet Hussain Amin Ismail Lai Carey Hwang Parmar Sanjeev Singh Samudrala Avinash Gopal Tse Wai Hung, Michael

3. Topics History of VerticalNet Competitive Landscape Resources and Capabilities Strategy Recommendations for the Future

4. What is B2B? Shoppers are Businesses not Consumers Shift Procurement Online with Industry Specific Interests

5. History of VerticalNetVerticalNet First Mover Advantage Investors are Key Internet Players Mutual Fund of Verticals

7. VerticalNet VerticalNet Markets –57 industry-specific VerticalNet Marketplaces supporting commerce, content and community VerticalNet Exchanges –VerticalNet Exchanges focus on direct material and OEM component exchanges VerticalNet Solutions –VerticalNet Solutions deliver the most comprehensive digital marketplace solutions available

8. VerticalNet’s Main Competition

9. Ariba Leading provider of B2B solutions and services to leading companies around the world Serves more than 40% of Fortune 100 companies Allows companies to build B2B marketplaces, manage corporate purchasing, and electronically enable suppliers and commerce service providers on the Internet VerticalNet’s Main Competition

10. Free Markets, Inc. Company’s Concept scour the globe for suppliers of anything from coal to printed circuit boards Reverse Online Auction suppliers compete in real time, lowering their prices until the auction is closed

11. Commerce One Offers comprehensive mix of e-business solutions and professional services Global Trading Web™ –A network of interoperable marketplaces, trading communities, and commerce portals Commerce One.net™ –provides the technology and business services that allow these global trading partners to work together

12. B2B.Yahoo.com Searches Many of the Business to Business Commerce Sites Allows Consumer to –Compare products quickly –Find prices –Select a transaction format (auction or fixed price).

13. Intangible Resources and Capabilities Brand-name- Inspire trust –Industrial markets based on relationships and trust amongst participant Strategic alliances and acquisition –Traditionally fill resource gaps with alliances or acquisitions

14. Intangible Resources and Capabilities Management Capability and Strategy –Led by professional management, with good reputations within the industry following a strict expansion policy Market Information –Access to valuable real-time, and voluminous market data

15. Network Externality –Value of Vertical Net’s community’s rises as more participants join –Can charge higher advert rates, as well as generate more saleable market data Intangible Resources and Capabilities

16. HR. Resources and Capabilities Marketing Staff –E–Experienced staff capable of generating advertising revenues Content Providing Ability –A–Attracting users, building a community

17. Resource Gaps: Expanding E-commerce Need to be augmented and refocused Need to make alliances to secure necessary software, and secure payment VerticalNet has always filled resource gaps by establishing alliances

18. Storefront Advertising Rates –Maturity of Vertical Trade Community –Number of storefronts –Amount of advertising purchased –Length of advertising contract Average Storefront Price –$7,000 to $8,000 per year Current Revenue Sources

19. Future Revenue Sources Advertising Parameters –Number of sales inquiries generated –Visitors sent from communities to advertisers’ web sites

20. Future Revenue Sources Renting space & Charging for ads % of the transactions

21. Future Revenue Sources Recent Feedback –Higher Level Storefront E-commerce center $15,000 per year –Facilitation of E-commerce 20% of interested buyers –Purchased within 6 months –Average transaction amount: $25,000

22. Transitioning Revenue Streams Currently –small and mid sized manufacturers –purchase retail and advertising space Future –Selling e-commerce solutions selling to CEOs, CIOs, MIS professions Technical issues of conducting e-commerce High-ticket items

23. Recommendation “Doing More of the Same?” –Content focus –Sponsorship –E-commerce “Doing More Than What We Currently Do?” –Advertising –E-commerce

24. Recommendation Doing More of the Same –Storefront –Advertising –Content Focus License Content E-commerce? –As industry develops, so will sources of revenue

25. ?Q&A?

26. Big Hands Thanks