Election Section

SAN FRANCISCO — With demand for its business software evaporating, fallen Internet star Commerce One Corp. said Monday it will shed 1,300 jobs, or nearly half its work force. 

The Pleasanton-based company said 700 of its 2,800 employees will be laid off. The cuts began Monday, Commerce One spokesman Andrew McCarthy said. 

Another 600 jobs will be jettisoned by spinning off operations unrelated to Commerce One’s primary product — so-called “business-to-business” software designed to create online exchanges for corporate customers. 

The spin-offs will be concentrated among several small consulting companies that Commerce One acquired in a $1.65 billion purchase of AppNet Inc. last year, McCarthy said. 

Commerce One has been retrenching much of this year. The company began the year with 3,700 employees. 

The latest purge is long overdue, said industry analyst Bob Austrian of Banc of America Securities in San Francisco. 

“The demand for the company’s product has already shown its true colors,” Austrian said. “Management is slowly aligning its costs with the reality of its revenue.” 

The company provided an inkling of the job cuts last week when it warned that its third-quarter revenue would range from $80 million to $83 million, well short of the $100 million in revenue that management had forecast in July. 

Commerce One also said it will lose 24 cents to 25 cents per share, worse than the consensus loss estimate of 23 cents per share among analysts polled by Thomson Financial/First Call. 

In last year’s third quarter, Commerce One lost 9 cents per share, excluding one-time charges, on revenue of $113 million. Through the first half of this year, the company had lost $2.57 billion on revenue of $271.5 million. 

Commerce One’s comedown largely reflects the growing disillusionment with business-to-business software, which initially enthralled investors by promising to revolutionize the way companies bought and sold goods. But the software hasn’t lived up to the hype, causing businesses to delay purchases and investors to dump the stocks of companies specializing in the sector. 

Commerce One’s shares gained 21 cents to close at $3.50 Monday on the Nasdaq Stock Market. The stock, which went public in July 1999, peaked at a split-adjusted $135.63 in early 2000. 

To weather the turbulence, Commerce One has deepened its ties to German software giant SAP, which invested more than $200 million for a 20 percent stake in the company. The investment stirred talk that SAP eventually will take complete control of Commerce One. 

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On The Net: 

http://www.commerceone.com