Commerce One finally hits the rocks

After spending several years in a death spiral, Commerce One is on the edge of oblivion, having run out of cash and laid off most...

After spending several years in a death spiral, Commerce One is on the edge of oblivion, having run out of cash and laid off most of its staff.

Commerce One has become a poster child for dotcom collapses. The nine-year-old company went public in 1999 with a history of losses and a grand plan to become the eBay of the business world with a portfolio of online business supplier networks.

At its height in 2001, the Commerce One's revenue reached $400m, but the company never turned a profit. As the bubble popped, so did Commence One's business model. SAP, which owned 20% of the business, eventually wrote off its investment.

Commerce One tried to reposition itself as a developer of business process integration software, but struggled for a viable business model. In 2003 it lost $65m on revenues of $36m, and last quarter its revenues collapsed to $2m, with the company losing $5m.

Commerce One said its attempts to find additional investment or debt financing had been unsuccessful, and it expected to file for bankruptcy. Even if it manages to sell its supplier relationship management software business, the sale is not expected to generate enough cash to cover the company's debts or to return anything to shareholders.

Ailing companies often fire their management, but Commerce One has stuck with CEO Mark Hoffman, who previously co-founded database company Sybase.

Stacy Cowley writes for IDG News Service

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