IRS Deal Boosts Beyond.com

The latest boost for e-commerce is coming from the United States government. Online software superstore Beyond.com (Nasdaq: BYND) was a top performer on Wall Street on Friday, one day after the company announced a major deal with the Internal Revenue Service.

Late last week, Beyond.com announced that it, along with privately held Intellisys Technology Corporation (ITC), has been awarded a 65-month, $120 million (US$) contract by the IRS. Beyond.com and ITC will electronically deliver and maintain Microsoft (Nasdaq: MSFT) software for more than 130,000 IRS desktop computers.

The agreement, which covers licenses for Microsoft’s Windows NT Server, Windows NT Workstation, Office Professional, Exchange Server 5.5 and other products, is the largest contract for the electronic delivery of software ever signed by Beyond.com. ITC will actually serve as the primary contractor in the deal, but Beyond.com should benefit in more than one way. Under the terms of the contract, the IRS will also be able to use Beyond.com as its Web-based store for the electronic purchase of additional Microsoft products.

The IRS is working hard to erase its reputation as a stodgy, inefficient behind-the-times operation, and IRS Departmental Service Systems Branch Chief Dan McLaughlin noted that the new deal will save taxpayer dollars while improving the IRS’ processes and services. Pete Hayes, general manager of Microsoft Federal Systems added that the software delivered to the IRS will “help the IRS move forward with the reorganization and tax modernization efforts.”

Government Committed To Digital Delivery

Beyond.com already is working extensively with the government by providing software electronically to the Defense Logistics Agency, National Imagery and Mapping Agency and the U.S. Patent and Trademark Office.

“We believe our contract with the IRS and ITC reflects the government’s continued commitment to electronic software delivery and Web-based procurement,” said Kendall Fargo, vice-president of enterprise and government sales for Beyond.com.

Stock Impact

On Friday, CS First Boston raised its revenue and earning estimates for Beyond.com and maintained its buy rating on the company. CS First Boston raised its 1999 revenue estimate to $131.7 million from $126.7 million and its 1999 earnings estimate to a loss of $3.88 a share from a loss of $3.90 a share.

Shares of Beyond.com climbed nearly 28 percent, rising 4-13/16 to 22-1/4, on Friday. Microsoft stock gained 3-3/16 to 79-9/16.

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