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Concert, Commerce One in e-commerce deal

The companies sign a contract that will allow Concert to create and host business portal-like sites where customers can exchange goods and services with suppliers.

Even the biggest phone companies in the world want to be e-commerce companies these days.

Concert, the joint venture that merged AT&T's and British Telecommunications' extensive international businesses, said today it has signed a business e-commerce deal with Commerce One. The contract will allow Concert to create and host business portal-like sites where customers can exchange goods and services with their suppliers.

It's one of Concert's first steps into what executives say will be a broad campaign to offer a range of Internet-based applications to their huge international clients.

"Communications service providers have a choice to make," said Dave Dorman, Concert's chief executive. "They can focus on transport, be 'dumb pipes,' or they can evolve."

That evolution is happening across the industry. A slew of recent deals has seen the telephone giants gear up their business e-commerce offerings, some like SBC Communications are even buying leading players in the industry in an attempt to catch up quickly.

The effort goes beyond those individual deals, as the companies aim at becoming a kind of central clearinghouse for smaller applications service providers, or ASPs. The telephone companies believe they have the customer base and the credibility that these small companies need, while the start-ups can provide much of the actual technology in partnerships.

AT&T recently announced its wide-ranging "ASP ecosystem" program, aimed at bringing small applications servers onto the AT&T network. As a part of that program it committed $500 million to a fund aimed at investing in applications service provider start-ups. BT added its own $500 million to the fund, allowing the two companies to invest side by side.

Analysts say this is a do-or-die campaign for the big communications companies, which are seeing profit margins on basic voice and even data transport services fall.

"The more successful ones are putting their focus on being ASPs as well as on (network connections)," said Blaik Kirby, vice president of Renaissance Strategy, a technology consulting firm.

But Concert's entry into the field is likely the most significant move yet, because of the huge purchasing power of its international high-tech, finance and oil conglomerate customers, Kirby added.