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October 25, 1999

Online Marketplaces Draw Investments, Gain New Apps
CSC invests in net market-maker chematch; trading dynamics ships market suite software

By Gregory Dalton

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nternet auctions and exchanges are attracting keen interest from technology companies eager to participate in a new way of bringing together buyers and sellers in vertical industries at a central Web site.

Computer Sciences Corp. last week invested an undisclosed sum in CheMatch, one of several startups trying to create an online marketplace in bulk commodity chemicals. CSC's consulting group will help CheMatch with systems integration and application development.

Other vendors are trying to tap into new online markets with software to enable interactive-bidding exchanges. Trading Dynamics Inc. said last week that its Market Suite software for hosting exchanges and auctions is now commercially available, and that PlasticsNet.Com will use it to let buyers and sellers dynamically set prices.

"The emergence of new marketplaces is happening extremely rapidly," says Kirk Arnold, president of CSC's consulting group. CSC also provides integration services to e-Steel Corp.'s electronic marketplace.

The global market for petrochemicals is about $200 billion, and CheMatch and competitive Internet market-makers ChemConnect and the Chemicals Exchange all hope to grab a piece of it. "The chemical industry is going crazy with E-commerce," says CheMatch chief operating officer Karen Morgan. "There are a lot of inefficiencies in this marketplace."

In the next quarter, the company will incorporate logistics into its technology platform. Morgan says CheMatch is also contemplating creating financial derivatives that let companies hedge the risk of price fluctuations. That will only work, however, when CheMatch has more deals flowing through its market; it has handled a total of just $100 million since 1998.

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