TRANSORA BUYS ON-LINE PROMOTIONS COMPANY

DAN ALAIMO

NAPLES, Fla. -- The scope of business-to-business Internet exchanges has become a little clearer with the acquisition of on-line promotions company planet U, San Francisco, by the consumer packaged goods e-marketplace Transora, Chicago.

The acquisition is expected to be announced this week during the first Global Exchange Summit here, which is put on by 13 industry groups, including the Food Marketing Institute, Washington; Food Distributors International, Falls Church, Va.; National Grocers Association, Reston, Va.; and Grocery Manufacturers of America, Washington.

Besides Transora, there are three other major B2B exchanges in the supermarket industry, all controlled by retailers: GlobalNetXchange, San Francisco; WorldWide Retail Exchange, Alexandria, Va.; and the proprietary Retail Link of Wal-Mart Stores, Bentonville, Ark.

Transora's acquisition is the first venture by any of them into such a specific area as promotions management. Among planet U's offerings are paperless electronic coupons -- called 'U-pons' -- accessed by consumers on the Internet and then relayed directly to retailers' point-of-sale systems using loyalty card numbers.

"We think the planet U acquisition plants us firmly in the space of automatic consumer promotions," said Judy Sprieser, Transora's chief executive officer. "This is something that we felt was a core part of Transora's full-line service offerings -- to automate and streamline all the various trading relationship activity between manufacturers and retailers, and the consumer."

Like many on-line companies, planet U had been looking for a buyer, she noted. "They are doing as well as you could expect a company with their strategic intent to be doing, given that they were floating out there as an independent business," she said. "They have a super business model, the proposition, the product, the intellectual property. What they lacked was the connection to a customer community that Transora offers."

Sprieser would not disclose terms of the all-stock transaction, but she noted that planet U will continue to function as an independent entity, and retain its San Francisco headquarters.

The financial backing and industry connections of Transora will accelerate the growth of the on-line promotions offered by planet U, according to Bob Egan, chief operating officer. "The packaged goods industry has experimented a bit with Internet promotions and tried a few things, but getting to critical mass has been slow to occur," he said.

Along with broadening the variety of promotional content for the on-line service, "longer-term, there is a great opportunity to improve the efficiency of the whole promotional chain. There are a lot of inefficiencies in promotions, and Transora can work together with the major retailers to improve that," Egan said.