*Update: UPS Debuts e-Ventures to Incubate E-Commerce Support

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United Parcel Service, Atlanta, formed a new subsidiary that will help provide back-end services for e-commerce companies, the company said this week.


The new division, called e-Ventures, will serve as the research and development arm of UPS' e-commerce operations. It will seek to develop new businesses that can leverage the existing warehouse and delivery infrastructure of UPS while helping more companies succeed at e-commerce.


"We want to build more businesses that 'virtualize' themselves and participate in the new economy," said Mark Rhoney, president of the e-Ventures unit.


He said e-Ventures has about five different businesses that it's developing, including a new unit called e-Logistics that will provide outsourced warehousing, order picking, customer service and other functions for small and medium-sized e-commerce companies or traditional companies that have a small e-commerce component.


Rhoney said e-Logistics has four customers lined up to begin testing the service in the second quarter, with additional tests slated for the third quarter. The business is scheduled to begin operating in October. UPS will invest an undisclosed sum to provide e-Logistics with infrastructure components such as additional distribution centers and a technology package.


UPS already performs some customized logistical functions for larger Internet sites, including Nike.com and Boo.com.


In addition to e-Logistics, Rhoney said e-Ventures has several other businesses in the planning stages. One of the other businesses, he said, could become a central repository for digital certificate authentication.
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