stock Watch: Breakaway Solutions Gains on Promotional Offers

Breakaway Solutions, Inc. (Nasdaq: BWAY) rose 1 1/16 to 5 3/4 Tuesday after the company announced a set of promotional offerings designed to help its customers improve their electronic business initiatives.

The offers, which the company said will be available “for a limited time,” include budget recommendations for 2001 e-business initiatives, education on competitive landscapes, and an application enablement and support check for independent software providers and vertical application service providers.

Boston, Massachusetts-based Breakaway said the offerings are aimed at helping customers in areas in which those customers have reported a need for “immediate guidance.”

The free programs are available not only to Breakaway customers, but also to “growing enterprises worldwide,” the company said. Such enterprises, which the company defines as “mid-market” brick-and-mortar companies, Global 1000 corporations or their divisions that are creating e-businesses, and venture-backed dot-coms, are the fastest growing segment of the e-business market, Breakaway said.

Breakaway recently warned that third-quarter results would be below previous expectations, with revenue flat from the second quarter as clients scale back, cancel or delay projects.

“We’ve seen a change in the market environment that almost every company in our sector is seeing,” president and chief executive Gordon Brooks said in disclosing the forecast.

“Everyone is feeling some impact from fewer dot-coms, but that trend is not new and has been used as a convenient scapegoat,” Brooks said. “The reality is that e-service providers are facing brick-and-mortar customers who now demand strong differentiation, and a compelling and sustainable value proposition for their businesses.”

To help cut costs, Breakaway is cutting its workforce by about 9 percent and “realigning” its staff.

“Less than 1 percent of all business is conducted over the Internet today, so we believe there is still a lot of work to be done,” Brooks said. “The value that Breakaway Solutions provides to its customers will outlast any temporary fluctuations in the marketplace.”

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