Don't Get Drunk On Blue Martini Yet

by Chris Connor

Intriguing Brand

Blue Martini {BLUE}.  What a name for an e-commerce software maker! Although the name Blue Martini does not exactly fit with what the company does, it certainly screams for attention.  In fact, the name has screamed for so much attention that Brandweek Magazine recently awarded Blue Martini Software's CEO, Monte Zweben, the title of "the Marketer of the Next Generation".  Though the award may be a great honor, it sheds little light on what the company actually does.  

BLUE provides software that allows companies to interact across multiple platforms such as Web sites, email, call-centers, wireless devices, and on-line trading exchanges with their customers and partners.  By having the ability to interact with customers over various platforms, companies are able to gather info on and target specific content to customers.  In contrast to legacy customer relationship management (CRM) systems, Blue Martini's systems are easy to deploy (usually around 8 to 14 weeks) and are flexible so that companies can change their e-commerce strategies when the market dictates it, which is a must in this world of ever-changing technology. 

Massive Hangover 

Not surprisingly, Blue Martini's stock price has experienced quite a hangover after partying with a highly successful IPO.  The stock jumped 174% to $54.78 in its first day of trading (priced at $20), July 25th of last year.  As can be seen by the chart below, this former high flyer can now be classified as penny stock.  The stock has been taken out and shot because BLUE's business model has been victimized by the fact that companies have been suspending major software projects because of fears about the economy.  Most other software companies have also faced this serious problem, but Blue Martini's comparatively small client base has intensified the problem, because it lacks the revenue source diversification that larger software companies have. 

Looking Forward

In some way, shape or form,  e-commerce will eventually be a major driver of the economy even though it has a black eye on Wall Street right now.  Given that the role of the company with this quirky brand name is to make e-commerce as effective as possible, it is poised to benefit from an economic recovery.  For example, BLUE is partnering with the two leaders of B2B commerce, Ariba {ARBA} and Commerce One {CMRC}, to extend the supply chain for online marketplaces by providing catalog management applications that that enables suppliers to market themselves on online exchanges.  Blue Martini is also actively looking to expand its customer base and has its eyes set on Japan and Europe for future expansion possibilities so it can reel in more multinational companies like Levi Strauss.