Who said B2B exchanges are dead?

America Online Inc. is determined to become a major player. On Wednesday it announced plans to spend millions of dollars to launch 10 business-to-business exchanges, with the hope of getting more small businesses buying and selling goods online.

AOL said the initiative is a joint effort with software company PurchasePro Inc.

AOL and PurchasePro said 10 companies, including Hewlett-Packard Co., Homestore.com and Spherion Corp. had licensed PurchasePro’s business- to-business online exchange software to set up private marketplaces that would link to AOL’s own exchange, Netbusiness Marketplace, for the mass buying and selling of goods.

About 1,500 exchanges have been launched in the last two years. However, International Data Corp. estimates that only 200 to 300 are actually doing business.

PurchasePro’s business-to-business software is currently used by 290 online exchanges.

Is the Fed Becoming bullish?

One day after consumer confidence registered a much-higher-than- expected reading, two Federal Reserve officials talked up the prospects for the overall economy.

In separate remarks, the Fed honchos said they expect the U.S. economy to recover in the second half of the year as businesses successfully work down their inventory of unsold goods.

However, they did concede that the economy currently remains weak, which suggests the Fed still might cut interest rates some more.

“In the first quarter it appears the economy remained soft, and in my view the economy is going to be weak again in the second quarter,” Federal Reserve Board Governor Laurence Meyer said after delivering a speech at Washington University in St. Louis, according to wire service accounts. “But I expect to see the economy to rebound gradually after that, although I expect it will remain below trend in the second half. By next year, I think the economy will be back toward trend growth.”

In a speech to financial analysts in Richmond, Federal Reserve Bank of Richmond President Alfred Broaddus also blamed a glut of inventory for the current economic slowdown. But, he too sounded optimistic about the latter part of the year.

“There is every reason to expect that we can negotiate the present rocky economic passage successfully and enjoy a resumption of stronger growth in the second half of the year or possibly even earlier,” Broaddus said, according to wire service accounts.

But, he conceded in the same accounts, “Clearly there are downside risks in the economic outlook. The Fed made that point clearly in our policy statement and I think that’s still true.”

Broaddus, however, pointed out a few encouraging signs, including the relatively strong housing and commercial construction sectors and the strong consumer confidence indicators.

Sprint Hangs Up on Option Plan

Some shareholders are no longer more equal than others at Sprint Corp.

It seems that the phone giant has scrapped a controversial clause in its stock-option plan that had allowed its directors to cash in their options once Sprint shareholders approved a merger with another company even if the merger never went through, according to the Wall Street Journal.

Last year Sprint was sued by Amalgamated Bank of New York, a large shareholder, complaining that Sprint officials changed a critical clause in its stock-option plan that allowed its executives to cash in their stock options after shareholders approved a merger with Worldcom Inc. in 1998 even though the deal wound up being cancelled after regulators failed to approve the merger.

The rest of the shareholders were unable to cash in their unvested options.

Amalgamated Bank alleged that Sprint executives knew the company’s proposed merger with WorldCom would never get regulatory approval. Sprint officials have called the allegation groundless, saying both Sprint and WorldCom spent money and time pursuing a merger they believed would be in the best interests of shareholders.

According to the lawsuit, in 1997 Sprint’s stock-option plan contained a clause that said all options would vest “upon a change in control.” In 1998, the suit contends, that language was changed to say the options would vest “if Sprint’s stockholders approve a merger.”

Sprint officials said the company altered its “change in control” clause in December 1999.

Congress Wants SEC to Probe Corporate Spamming

Two Democratic Representatives–John Dingell and Edward Markey–have asked the Securities and Exchange Commission to immediately look into corporate practices of sending unwanted ‘spam’ e-mails to consumers.

In a letter to acting SEC chairwoman Laura Unger, the legislators said they want ‘slammed shut’ a potential loophole in the privacy protections provisions of the Gramm-Leach-Bliley Act, which overhauls the financial services industry.

“In order to better understand financial services industry e-mail spamming practices, we request that the commission initiate an immediate investigation into securities industry use of unsolicited ‘spam’ e-mails,” Dingell and Markey wrote.

“There is no question that unsolicited commercial e-mails are a problem for millions of consumers and industry,” they wrote, adding that large bulk spamming is becoming a nuisance for computer networks, local telecommunications networks, and computer users who receive them.

Local Governments Still Want Tech Companies

Local and state governments are still strongly interested in luring tech firms to their areas, according to a KPMG poll of state and local development agencies.

It found that 97 percent of those agencies ranked “attracting high- tech/digitally driven companies” as a high priority in 2001.

Nearly 80 percent of state-level respondents and more than 52 percent of local respondents said they had modified their corporate “incentive packages” to target high-tech businesses.

“Just because our economy is softening a bit, high-tech hasn’t fallen off the radar screen completely,” KPMG LLP National Partner Kerstin Nemec told Newsbytes. States and localities “still want to be known as good (places) for these types of companies to do business.”

In fact, Nemec speculated that the economic slide could escalate, rather than reduce, competition among governments for high-tech companies.

Nemec said in the Newsbytes account that some governments may actually bolster their incentive packages in order to appear more competitive.

Agere Makes Its IPO… Finally

Agere Systems’ stock closed up a nickel, to $6.05 on its first day of trading on Wednesday.

Remember, the overall stock market took a beating, led by telecom issues. So, all things considered, this wasn’t too bad of a first-day performance.

Agere sold 600 million shares at the bottom of its already halved price range. Agere has a market value of around $9.6 billion, based on 1.6 billion common shares outstanding. Under the original IPO terms, Agere would have been worth around $26 billion.

Morgan Stanley Dean Witter & Co. was the lead manager of the IPO, which raised $3.6 billion.

The Agere IPO is now the largest of the year.

Meanwhile, on Wednesday Agere, whose optoelectronic components send and receive light that carry data and voice traffic over optical networks, reiterated it may post a “significant operating loss” for fiscal 2001 due to lower order volumes, and delayed or canceled orders by customers.

In other IPO news, Natus Medical Inc., a medical device company, removed Prudential Securities Inc. and added First Union Securities Inc. and Adams Harkness & Hill Inc. to the underwriters list.

Today’s Layoff News

• HomeBase Inc. plans to fire more than 2,600 workers and close 25 home improvement centers it had planned to convert into home furnishing stores. HomeBase said Tuesday that it plans to open 42 House2Home stores, down from the 67 conversions previously planned. The layoffs, including 140 at its headquarters, represent more than 25 percent of its work force.

• Electronic parts maker AVX Corp. said it will put about 1,500 workers at two South Carolina plants, in Myrtle Beach and Conway–about 60 percent of the company’s work force in Horry County–on furlough from April 9-13 because of a slowdown in orders. The company also furloughed workers from March 12-18 and CFO Kurt Cummings said the practice could continue until September, according to published reports.

• Basket maker Longaberger Co. said Wednesday it will cut 400 jobs, about 5 percent of its work force, because of the slowing economy.

• HotJobs.com laid off about 100 workers.

• Rumor has it 150 of 200 employees were fired by Office.com on Wednesday, according to a website that specializes in reporting these types of events.

Debt News

• Delhaize America Inc., the fifth largest supermarket chain with about 1,420 stores on the East Coast, plans to privately sell $2 billion of global debt

• GE Capital Commercial Mortgage Corp. on Wednesday filed a shelf registration for up to $1 million in pass through certificates. It said it plans to use the net proceeds to buy trust assets or for general corporate purposes.

• Washington Mutual Mortgage Securities Corp., a wholly owned indirect subsidiary of savings and loan holding company Washington Mutual Inc., on Wednesday filed with U.S. regulators to sell up to $5 billion in pass through certificates.

• WD-40 Co. reduced its quarterly dividend to 27 cents a share from 32 cents in an effort to get better credit terms.

From the CFO.com “Brief” Case

• The European Central Bank decided to leave interest rates unchanged. There was some talk that it would cut rates today.

• Regional airline Comair on Wednesday cancelled all flights through the morning of April 5 as its pilots spent a third day on strike.

• MetLife Inc., the largest U.S. publicly traded life insurer, on Wednesday said its board of directors authorized an additional $1 billion common stock repurchase program. The latest buyback will begin after the completion of an earlier $1 billion repurchase program announced June 27, 2000, the company said.

• Starbucks Corp. Chairman Howard Schultz said on Wednesday he will sell 1.7 million shares in the coffee shop giant via forward contracts to fund his investment in the Seattle Supersonics basketball club. In variable prepaid forward contracts struck last week, Schultz agreed to sell the shares, about 20 percent of his current holdings and options, at a set price three years from now, letting him retain company voting rights until the sale. Terms were not disclosed. Schultz and a group of unnamed investors in January announced plans to buy Seattle’s National Basketball Association franchise for $200 million. The deal is scheduled to close on Friday.