Commerce One runs out of cash
The software maker laid off most of its staff this week
IDG News Service - After spending several years in a protracted death spiral, Commerce One Inc. is finally on the verge of ending its misery by running out of cash. The San Francisco software maker laid off most of its staff this week and said in a regulatory filing today that it is down to its last $300,000 in operating cash.
Commerce One has become a poster child for dot-com collapses. The 9-year-old company went public in 1999 with a history of losses and a grand plan to become the eBay of the business world thorough a portfolio of online business-to-business supplier networks. While the company's revenue grew to $400 million at its height in 2001, Commerce One never turned a profit, and as the dot-com bubble popped, so did its business model. SAP AG, which owned 20% of Commerce One, eventually wrote off the investment.
Commerce One retooled its business model and tried to reposition itself as a developer of business process integration software. But it struggled to make that business viable: In 2003, it lost $65 million on revenue of $36 million, and last quarter, its revenue slipped to $2 million, with a loss of $5 million.
Commerce One said this week that its attempts to find additional investment or debt financing have been unsuccessful and that it expects to file for bankruptcy. The company said it's trying to sell its supplier relationship management software business, but it doesn't expect the sale to generate enough cash to cover its debts or to return anything to stockholders.
Ailing companies often fire their management, but Commerce One has stuck with CEO Mark Hoffman, who previously co-founded database company Sybase Inc., throughout its rise and fall. The company announced the layoff of 56 employees, leaving it with 36.
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