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How to Make Life Interesting after Growing 30,700%

Written By: D. Geller
Published On: March 8 2000

Event Summary

Chemdex Corp. (NASDAQ: CMDX) announced that it will restructure itself with a new name and mission. The $30.8 million vertical marketplace company with lines in life sciences and medical chemicals and equipment will become an Internet incubator, leveraging its existing technology to build other vertical marketplaces.

The new company will be called Ventro and will trade under the symbol VNTR.

Market Impact

It is hard to argue with the success of a company whose one-year revenues jumped a massive 30,700% percent. Even better, Chemdex recently cheered investors with fourth quarter gross revenues of $19.3 million, 160 percent of analyst estimates, and losses of only 47 cents per share, 2 per cent better than predicted.

The company poses a potentially formidable challenger to VerticalNet. E-procurement is only one aspect of VerticalNet's 50 industry-specific sites, which also offer catalog services and other content. Should Ventro decide to enhance its sites with the same kind of free material VerticalNet could easily be swamped.

However, a content site does not necessarily attract buyers for the larger corporations, so a real challenge in this space is more likely to come from VerticalNet choosing to change its focus to attract higher volumes of commerce than from Ventro choosing to fish for individual buys.

User Recommendations

Users should cheer. Having a savvy successful company make a mission out of creating superior vertical marketplaces will advance the state of the art and the levels of competition. This simply provides more reason for companies that are not exploring E-procurement opportunities to do so.

 

 
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