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An e-commerce coup?
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July 7, 2000: 3:16 p.m. ET
Broadvision loses key contract to Art Technology; analysts see shifting tide
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NEW YORK (CNNfn) - Investors punished shares of electronic-commerce software supplier Broadvision Friday after it lost a high-profile account to one of its competitors.
After the close of trading Thursday, American Airlines said it has selected software developed by Art Technology Group (ARTG: Research, Estimates) to power its new AA.com Web site.
Although financial terms of deal were not disclosed, the news rocked shares of Broadvision (BVSN: Research, Estimates), whose software had powered the American Airlines site. They were down 12-1/2 at 41-1/8, topping the list of big movers on Nasdaq in afternoon trade Friday.
Meanwhile, shares of Art Technology soared 11-91/6 to 106-1/16.
 Executives at Broadvision in Redwood City, Calif., said the impact on their overall operations would be negligible and the sell-off of the stock was overdone.
"I think what is going on with the stock is an over-reaction," said Jim Thanos, executive vice president of sales. "It's really business as usual here, with no material effect on Broadvision."
Shares of Art Technology have been among some of the highest flyers on Wall Street recently, nearly tripling in value since mid-April. Broadvision stock also has been among the hot tech names, although it has not climbed quite as high as its competitor in recent months.
 Ian Morton, an analyst at Chase H&Q, said the deal "represents a significant
strategic win" for Art Technology over Broadvision, and it put to rest rumors that had been circulating in the market for weeks.
American Airlines said it selected Art Technology's Java-based software, called "Dynamo," because it allows the flexibility to address specific platform needs and it supports other types of products.
Java is a platform-independent software technology, meaning it works in any number of computing environments regardless of the underlying hardware and software.
American Airlines is redesigning its Web site to make it easier for customers to book flights and get information. The redesigned site is expected to be completed by the end of this year.
Jeet Singh, Art Technology's chief executive, said the contract is "in line with our typical large customer deals," adding that it could become more lucrative for the company as American Airlines builds out its Web operations.
"We sell software by the CPU as opposed to large site licenses," Singh said.
"So when we sell software to any of our large customers, they tend to continue to buy software over time, depending on what they're building and how many servers they put it on."
Analysts highlighted Art Technology's Java-based approach to software development as a key element in winning the American Airlines contract and said the company potentially could use it to gain an edge against its competitors.
"We believe the winning attributes for Art Technology were the company's open, pure-Java-based architecture and its close relationship with the third-party integrator," Chase H&Q's Morton said.
Brent Thill of Credit Suisse First Boston also pointed to company's technology as a significant factor in winning the American Airlines business.
"The strength of Art Technology's technology layer is causing significant disruptions with many of the top Fortune 500/Global 2000 organizations," Thill wrote in a note to clients Friday. "We believe there could be more displacements to come."
Thill added that Broadvision management was "clearly surprised by this announcement," when he spoke with them Thursday. He said they told him they thought the reasons for the displacement were poor installed-base account management and American Airlines concerns about how to upgrade their current Broadvision software to an upcoming Java-based version expected in early 2001.
"We believe that the momentum has shifted in favor of Art Technology's technology layer," Thill added. 
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