Liffe looks to target B2B markets with dot.com spin-off

Liffe, London's embattled futures exchange is seeking to outflank its fast consolidating European rivals by hiving off its technology arm into a new company called Liffe.com that will target the internet business-to-business (B2B) market.

Discussions are taking place with potential partners on both sides of the Atlantic with a view to using Liffe's Connect trading platform to enable online trading in everything from aircraft to machine tools, and pharmaceuticals.

Brian Williamson, Liffe's chairman, said that having pulled itself back from the brink and developed a "world-beating" technology platform with applications that go far beyond an ability to handle futures and options trading, Liffe had a choice whether to try to use it to pinch business from rivals or do something radically different.

Mr Williamson, who refused to comment on speculation he is being lined up to be the next chairman of the London Stock Exchange, said: "We want to be adventurous. We are convinced that this is the right way for the exchange to go." He said that he new company could be floated off in due course.

Liffe.com follows the recent alliance of major car producers for online components procurement and Tuesday's link-up to launch a Web-based oil and metals exchange.

The Liffe chairman said: "The internet is creating a whole pile of new entities or Webs that look like markets.What they don't have is a large matching engine."

After the upheaval of the past 18 months, Mr Williamson said Liffe was now on track to return to profit this year. Following last year's drastic cuts which saw its staff count slashed from 1,200 to 652 and the closure of the open outcry pits, losses fell to £22m from £60m the year before.

Meanwhile, Hugh Freedberg, Liffe's chief executive played down the prospect of joining Euronext. Mr Freedberg said he had met Jean-Francois Theodore last week at a convention in Florida at which the head of the Paris Bourse invited Liffe to join the three-way Euronext alliance which was unveiled on Monday. Mr Freedberg said that while Liffe was delighted with the suggestion that Euronext might adopt Connect as its trading platform, he was not sure it was sensible to link this with formal membership of the alliance.

Peter Coym, of the Frankfurt Bourse, has also appeared to rule out joining the Euronext alliance. "I can't imagine Frankfurt joining the three-way bourse alliance," he said. "The original plans for a simple alliance of exchanges are no longer on the agenda as they don't deliver the results market participants are demanding. We need to move to a single platform."