SAP to Form Pact With Yahoo

FRANKFURT — Germany’s SAP AG today will announce an alliance with Yahoo! Inc. as part of its latest effort to turn itself into an Internet software company.

SAP (SAP) plans to form a separate U.S.-based subsidiary, called SAP Portals, to provide software and services that help large corporations set up Web sites for employees, customers or suppliers, people familiar with SAP’s plans said.

Yahoo (YHOO) will supply news, stock quotes, flight schedules and other information that SAP Portals can offer its customers, these people said.

The alliance doesn’t involve an investment in Yahoo by SAP, they said. Neither SAP nor Yahoo could be reached for comment.

SAP is the world’s largest supplier of programs that corporations use to coordinate their manufacturing, purchasing, finance or human resources operations. In a bid to increase growth, it is now trying to turn itself into a supplier of e-business software.

It has already set up one separate U.S.-based company, SAP Markets, that in partnership with Commerce One Inc. (CMRC) provides software for online marketplaces. SAP Portals will be based in Palo Alto, Calif., and built around TopTier Inc., which SAP acquired last week for $400 million in cash, these people said.

The main goal of SAP Portals will be to help corporations set up employee Web sites on their intranets or internal networks, they said.

This could open a new source of revenue for SAP by increasing the number of people at customer site who use its software. Its standard ?back office? applications are often only used by 15% or 20% of a company’s employees.

However, it may have to be careful to keep its subsidiaries from competing with each other. SAP Portals will have its own sales force and could help corporations build Web sites for buying and selling products the same business SAP Markets is supposed to pursue.
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