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Water on the Web
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February 9, 2000: 2:45 p.m. ET
Water company Azurix to launch B2B exchange for buying and selling H2O
By Staff Writer Martha Slud
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NEW YORK (CNNfn) - In another sign of the explosive growth of business-to-business Internet ventures, Houston-based Azurix Corp. is launching an online commodity exchange for one of the world's most basic resources: water.
Azurix (AZX: Research, Estimates), a water services company that was spun off last year from energy producer Enron Corp. (ENE: Research, Estimates), will use software provided by business-to-business Internet company Ariba Inc. (ARBA: Research, Estimates) to create a Web-based network called Water2Water.com.
Buyers and sellers in 17 Western states -- where water is particularly scarce -- will be able to use the exchange to peddle excess water supplies or shop for water services. The network targets customers including local water districts, farmers, landowners and environmental customers.
Azurix estimates that through loosely organized buying and selling, water transactions in its target area currently total about $2 billion to $3 billion annually. By creating a market that makes water a tradable resource, the commodity will have more of an economic value, company CEO Rebecca Mark-Jusbasche said.
"All we're trying to do is create an environment where there's an open exchange of information and transparency between buyers and sellers," she said. "Right now, these things are done by phone and fax and bulletin board postings. The Internet is a perfect way to provide the information to people at a very low cost."
The service currently is being tested and is expected to launch in March.
"I think there's definitely a market," said Timothy Winter, a utility analyst at A.G. Edwards. "This is one step in trying to open up the wholesale water market in the Western states.
But, he said, the network may encounter government and regulatory obstacles.
"There's going to be all kinds of challenges to anything progressive," he said.
Meanwhile, Azurix is developing an underground water-storage facility in Madera County, Calif. The project, launched in October 1999, will allow the company to "bank" excess water supplies, giving it potential resources for the water transaction market.
In afternoon trading, Azurix shares edged up 1/2 to 8-3/8. Ariba stock lost 1-7/8 to 186-3/8, dipping into negative territory after jumping to 195-1/2 earlier in the day. 
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