Those who lived through Y2K will not forget that, just before the market collapsed, one of the last "next big things" to catch Wall Street's fancy was "B2B" -- business-to-business e-commerce. It was supposed to be a revolution in the marketplace, a new way of doing business that would slash the costs of how businesses bought and sold products to each other.
Playing Lenin, Trotsky, and Stalin in that revolution were three companies: Commerce One
In the Russian revolution, Lenin died first. True to form, Commerce One itself has nearly died, now trading for just over $2 a stub and at a $61 million market cap. (Ariba's market cap is $832 million, and Manugistic's is $594 million.)
Commerce One reported its 2003 earnings yesterday and, Fools, I fear I must come not to praise the firm, but to bury it. Revenues for 2003 were barely a third of its 2002 revenues, and it lost $2.12 per share -- more than the shares are currently worth.
Granted, in 2002, the company lost a staggering $20.33 per share, so one could argue that Commerce One's finances are actually improving. Nonetheless, the situation still looks pretty grim. The business has an enterprise value-to-free cash flow ratio of -2.0. Return on assets and equity, revenue growth, and profits are all similarly negative.
One more telling point: the company's description of its business (you can see it here) no longer even refers to business-to-business as Commerce One's primary focus. Today, it focuses on "Composite Process Management". And while its B2B software still apparently has some ability to generate revenues -- the company has licensed its Commerce One Auction, Auction Services, Buysite, Catalog, and Marketsite packages to Mitsubishi Corporation -- those revenues have fallen by roughly half between 2002 and 2003.
Where many saw so much promise, now there's little to be optimistic about for Commerce One. It's now just another money-losing software company, hanging on for dear life.
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Rich Smith owns no shares in any of the companies mentioned here.
