Green grass at Interleaf

BroadVision is one of the best recent examples of the potential of the combination of knowledge management and electronic commerce.

In January, the company bought out document management vendor Interleaf, in an all-stock deal worth $1.4 billion.

The deal was interesting in that both companies have had similarly meteoric rises over the past six months.

Interleaf is an older company, and its doldrums had lasted for more than a year after the markets had marked it down as an old-style document management vendor.

After a long gestation, the company had just announced two new products late last year: a content management application called Blade-Runner based on the eXtensible Markup Language (XML), and a publishing solution for wireless devices called X-WAP.

The goodwill from this new direction had pumped the stock up so much that the share price is more than 30 times its price 12 months ago. Latest news was that Interleaf had followed Oracle's lead in developing a news portal for wireless Web users.

BroadVision has had only a slightly less wild ride, with its valuation jumping by a factor of 20 in the past year to the staggering total of $34 billion.

Its revenue for 1999 was less than $200 million, more than doubling from 1998, and only its second year of profitability.

1000 TIMES EARNINGS

If you take the traditional indicator of valuation as a multiple of profit, which was $30.3 million in 1999, you will find BroadVision is valued at over 1000 times earnings.

That's one followed by three zeros.

BroadVision certainly has some blue-chip clients for its 1-to-1 suite of KM, financial and e-commerce software, including Telstra and ANZ in Australia. It is hard to see its stock go much higher, nevertheless.

A 3-for-1 stock split of BroadVision shares should have occurred by the time Image & Data Manager goes to press, adding further cachet for the retail investor. Not that it really needs any more!