Ventro pulls plug on e-marketplaces

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Has the dot-com deathwatch come to b-to-b?

It looks that way, as a handful of e-marketplaces-including, and Inc.-this month closed up shop.

Most shocking was Ventro Corp.'s decision to shut down Chemdex and Promedix, its most high-profile e-markets. Chemdex in particular had been a veritable poster child for the e-market revolution.

Ventro announced in October it was exiting the business of owning e-markets, concentrating instead on providing technology and business services to other e-hubs. Ventro apparently searched for a buyer for the two pioneering marketplaces but, in an ominous sign for the entire sector, couldn't land a deal.

Analysts questioned Ventro's new strategy. "They are hunkering down and trying to build out a full-service solution. Their model sounds almost like a consulting firm, and there's a lot of those out there," said Jon Ekoniak, an analyst with U.S. Bancorp Piper Jaffray Inc. "I'm not sure what new stuff they bring to the table."

Ventro said it will lay off 235 employees with the move and take restructuring charges of about $400 million in its year-end results.

Ventro still has four markets in its portfolio-MarketMile, Broadlane Inc., Industria and Amphire Solutions Inc.-all done with established brick-and-mortar partners.

Elsewhere, hotel industry e-marketplace Hsupply last week disclosed it has gone out of business as well. Hsupply CEO Ravi Kalakota said his company failed to attract the funding it needed to stay in business and was hurt when large hoteliers-such as Marriott International Inc. and Starwood Hotel and Resorts Worldwide Inc.-surprised him by launching their own b-to-b ventures.

"We were pigeonholed as the low-end guys, and that hurt us when we tried to raise more money," Kalakota said.

E-hubs aren't the only ones facing hard times. The vendors serving them are finding rough sledding.

Last week, EC Cubed Inc. shut down after failing to land the funding it needed to reposition itself. Last summer, it had embarked on an effort to market its technology as a platform for building e-marketplaces.

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