AppNet to help MCI on e-trade

Md. Web specialist to provide services for corporate clients

Deal may yield $30 million

Telecommunications

January 05, 2000|By Shanon D. Murray | Shanon D. Murray,SUN STAFF

AppNet Inc. said it signed a deal yesterday with MCI WorldCom Inc. to provide the telecommunications giant's global and national corporate customers with e-business services.

The deal, which could be worth $30 million in the first 18 months, sent AppNet's stock soaring $7.25 to close at $52.25 a share. The Bethesda company sold shares for $12 during its initial public offering in June. The stock hit its high Oct. 25 when it sold for $67.25.

MCI WorldCom closed yesterday at $49.50, down $2.4375.

Now that Y2K concerns have abated, companies will turn their attention to their e-business strategy, said Ken S. Bajaj, the chairman and chief executive officer of AppNet, a consulting company that offers Internet strategy, marketing and technology services.

According to Forrester Research, an estimated 53 percent of spending on information technology will go to Internet and e-business projects.

"MCI WorldCom will provide Internet and networking infrastructure, and we will provide applications. That means increased revenue for us, and more traffic and increased revenue for MCI WorldCom," Bajaj said.

MCI WorldCom will offer AppNet's "e-business solutions" such as interactive marketing, back-office billing and data integration via the high-speed Internet service MCI WorldCom offers its corporate customers.

AppNet said the combined services would be sold under the MCI WorldCom brand. AppNet and MCI WorldCom are dedicating sales and marketing staff to serve the new agreement, it said.

Wall Street reacted enthusiastically to the news because MCI WorldCom is a "significant partner," said Justin Behar, a senior analyst with Gartner Group Dataquest in California.

"This is a good play for AppNet strategically," he said. "It provides them with access to global and national accounts that the company would not have easily gotten."

And the deal allows MCI WorldCom to offer additional e-business applications, Behar said.

AppNet was founded in November 1997 and aims to become a major player in the Internet commerce market. The company is ranked among the 50 largest pure Internet companies by Internet World magazine.

The company reported $69 million in revenue in 1998, and has 950 employees in 21 offices in the United States and Europe.

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