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Ariba Forms B2B Venture with Bank of America

By Los Angeles Newsroom
Apr 4, 2000 12:00 AM PT

Business-to-business (B2B) e-commerce solutions company Ariba (Nasdaq: ARBA) and Bank of America (NYSE: BAC), the largest bank in the United States, announced plans today to develop a suite of B2B services and a marketplace for the bank's two million business customers.

Ariba Forms B2B Venture with Bank of America

The Charlotte, North Carolina-based Bank of America, with $633 billion (US$) in assets, will set up a new company, Banc of America Marketplace LLC, powered by the Ariba B2B Commerce Platform. Bank of America will also use Ariba's platform for its own procurement and marketplace operations. The bank spends about $7 billion a year on purchases from outside suppliers.

The companies will share transaction-based revenues from the venture.

Catalyst for Accelerating E-Commerce

"This is the most strategic move to date on the Internet for Bank of America, positioning us to redefine finance in the new economy," said president and COO Kenneth D. Lewis.

The cornerstone of the new alliance will be a B2B financial services engine to provide businesses of all sizes with expanded payment and finance options, including credit card, Automated Clearing House (ACH), wire transfers, and foreign exchanges. The new product will also provide businesses with Web-based information integration and Electronic Data Interchange (EDI).

According to Ariba President and Chief Operating Officer Larry Mueller, "The breadth of financial and marketplace services will be important catalysts for accelerating B2B e-commerce adoption and raising the bar for complete commerce process integration."

Horizontal and Vertical Marketplaces

Initially, the marketplace aspect of the venture will focus on small and medium-sized business customers of Bank of America, providing them with access to the bank's preferred suppliers at negotiated contract prices. Offerings will be expanded over time, and the bank will develop "vertical communities" within the marketplace to target specific industries with common buying and selling needs.

"This ubiquitous engine will provide businesses of all sizes with expanded payment and finance options and automated information flows for all types of purchases, from computers to capital equipment to tons of steel," the companies said.

Eventually, Bank of America business customers will be able to buy from and sell to each other, using either traditional catalog pricing or auctions. The system will be available through "a variety of desktop or wireless Internet-enabled devices," the companies said.

Ariba Sees Strong Quarter

The announcement was the second major alliance in as many days for the Mountain View, California-based Ariba. On Monday, the company said it would team up with global consultant Arthur Andersen to expand its worldwide offerings of B2B services.

Ariba also announced Tuesday that it expects second-quarter revenues to top analysts' projections by as much as 25 to 30 percent. The company said it expects to book revenues of $36 to $38 million, up from $23.5 million in the first quarter of the year.


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