The deal comes a year to the day after the announcement of a partnership among Ariba, i2 and IBM Corp., Armonk, N.Y., designed to provide businesses with end-to-end electronic commerce platforms. Although i2 continues to have a relationship with IBM, the deal "effectively puts the lid on the Ariba partnership," said Kash Rangan, an analyst with Dain Rauscher Wessels Inc., Minneapolis.
I2's core supply chain software products are gaining acceptance by corporations on the Internet; otherwise, i2 would not be willing to challenge Ariba head-to-head, said Bill Gramas, VP and software analyst with Gruntal & Co., L.L.C., New York.
"For companies looking to interact on the Internet, there's recognition that they need an Internet-enabled supply chain," Gramas said. "Getting volume discounts on pencils is really secondary."
Internet Capital Group, Wayne, Pa., bought RightWorks for $36 million and 5.89 million shares of stock in June. ICG will show a non-cash loss of about $490 million. It comes as ICG seeks ways to shore up its stock, which has fallen from a 52-week high of more than $139 to around $3 at press time. "ICG needs to extract some value from their portfolio, and they are doing it," said David Farina, an analyst with William Blair & Co. L.L.C., Chicago.