LivePerson: Turning online window shoppers into buyers

It will be a long time before investors forget the dot-com meltdown that started in April of 2000. But there was a problem with the young, overly exuberant dot-com industry. You cannot ship pet supplies or groceries through the internet.

The technology community has gotten smarter. Most are now selling bits, not atoms, through the Internet. One of the hottest categories is providing software as a service (SaaS). Companies such as SalesForce.com host their software on their own large computers. Instead of shoving software into a box and shipping it, they lease it out as a service—kind of like subscribing to a movie channel instead of buying DVDs. This not only simplifies things for the customer, it provides a more predictable revenue stream.

One dot-com company, LivePerson Inc. (Nasdaq: LPSN), barely survived its trial by fire in the crash. Launched in 1995 to provide text-based chat software for corporate Web sites, it went public in April 2000 at nearly $10, and by mid-2001 was trading at $0.11.

But LivePerson is now coming back to life with a hosted service that does a very neat trick. Its software, Timpani, helps convert people who visit a vendor’s site into paying customers. Timpani can analyze the “click stream” of anyone visiting a site to identify which are potential buyers.

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