Andrew "Flip" Filipowski moved Tuesday to reinvent his struggling divine interVentures, announcing the onetime Internet incubator should now be seen as a software company called "Divine Inc."

Filipowski announced the change at a meeting of analysts in San Francisco after telling the room Divine had acquired a Kentucky software maker, SageMaker, for $16.5 million in stock.

Filipowski also said the company--with $265 million in cash on hand at the end of 2000--plans an aggressive strategy of acquisition to build the software focus of the business. He said Divine will no longer set its sights on bringing members of his so-called "Internet Zaibatsu" public.

"Today it does not really warrant to be aggressive in the IPO market," Filipowski said in a phone interview. "We don't believe that in the creation of our Internet Zaibatsu that we will be taking individual members public. They will be wholly owned subsidiaries."

About a dozen of the companies Divine holds a stake in already have a software focus, Filipowski said. "They will be very intertwined now," he said.

The rest of the 35 Divine companies--which at one time numbered 52--can still help each other by sharing services and clients. Those companies will remain under divine interVentures, which will be the investment arm of Divine Inc.

Some of those original members might eventually go public, he said. But the members of the core operating focus--portal software--will be subsidiaries.

In acquiring SageMaker, Divine hopes to take advantage of the corporate portal market, which links workers in companies with other co-workers, clients and information. One report suggests the market will grow from an estimated $554 million this year to $2 billion in 2004.

SageMaker had annual revenue of about $6 million for fiscal year 2000 and has 450 clients with more than 250,000 corporate users.

Divine also announced an alliance with Computer Associates International, the software giant that in 1999 acquired Filipowski's former company, Platinum Technology, for $3.5 billion.

Computer Associates, which has developed its own portal technology, will cooperate with Divine on technology development, support, sales and marketing. The two companies are in discussions to extend the agreement to encompass additional technologies.

With the acquisition and the alliance, Filipowski said Divine could increase its revenues from $40 million last year to $100 million this year and more than $200 million in 2002.

The chief executive of one member of the Divine corporate family, NTE, a Downers Grove company that makes transportation management software for trucking and shipping firms, said the move made sense.

"The marketplace is forcing a lot of companies to rethink what they are doing," Jim Davidson said. Divine owns about 5.5 percent of NTE.

Analysts and investors, however, were hesitant to embrace the news.

"I'm very skeptical," said Morningstar stock analyst George Nichols. "It's a major shift in the business model. They failed to prove themselves with their original business plan. It's going to take some time for them to show some success."

Nichols said Filipowski, who formerly ran Platinum Technologies, and other top Divine executives, have the needed experience in running a software company. But he said the portal industry is already seeing such heavy hitters as Oracle and IBM enter the market.

The company's stock closed Tuesday at $1.56, down 3.85 percent. Since going public in mid-2000, the company's stock has plunged from a 52-week high of $12.44 to a low of $1.

"We are very troubled by" the stock price, Filipowski said. "But it's a long, long way before the fat lady sings. At some point we expect to be able to smile about the price."

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SITE TO BE SOLD

Divine's change in strategy could officially end its plans to build a home for itself and other high-tech companies on Chicago's Goose Island. Real-estate sources said they expect the property, which is in a thriving industrial district, will be sold soon.

The city had agreed to provide Divine with a $14 million subsidy toward the $63 million project. A spokeswoman for the city's Department of Planning and Development said an agreement was never completed with Divine, so the city never advanced any money.

The project, on the site of an old metal grate factory at 1132 W. Blackhawk, had been touted as bringing 600 jobs to Goose Island. Divine owns the site in a partnership that includes the real-estate firm Colliers Bennett & Kahnweiler Inc.

David Roeder