On November 29, 1999, Enron launched EnronOnline, an electronic transaction platform that offered free, real-time pricing information for 2,100 commodities, including electricity, natural gas, coal, pulp and paper, clean air credits, bandwidth, weather and credit derivatives, petrochemicals and plastics, and oil and refined products.
Unlike other Internet commodity service providers, EnronOnline did not match buyers with sellers. Instead, commodity consumers and producers around the world were able to instantaneously conduct transactions directly with an Enron company as principal. EnronOnline was simply an extension of what occurred within the various Enron companies via the telephone on a daily basis. EnronOnline worked by matching itself with every potential buyer or seller, making money on every transaction.
EnronOnline ran on an Oracle database and WebLogic Java application servers that ran on Windows NT. Portions of the site took advantage of Macromedia shockwave, and transactions were secure using SSL encryption.
Efficiency gains made possible by dynamic pricing and trading were especially well suited to Enron’s online business because electronic trading could match the speed with which commodity pricing changed. Transactions that used to take up to three minutes to complete over the phone now took just a second or two.
Enron charged no commission and no subscription fee, an offer which led some analysts to forecast the extinction of traditional brokerages.
Though it didn’t last long enough to put traditional brokerages out of business, EnronOnline quickly made its presence known. It became the largest ecommerce website in the world. In just two years it bought and sold $880 billion worth of products, averaging 6,000 transactions a day worth an average $6 billion.
A particular element of symmetry: EnronOnline closed down for online trading on the morning of November 28, 2001, exactly two years after it went live, and only six months after it reached the one-millionth transaction milestone.