New York - CPA2Biz, the Internet portal conceived by the American Institute of CPAs, has a new president and technology platform, but hasn't yet shed the nagging image problems within the industry.


The online distributor of products and services to CPAs and their clients recently acquired Rivio Inc., a Web-hosting platform and provider of Internet-based services and software applications to small businesses. Rivio has become a wholly owned subsidiary of CPA2Biz, and its founder, Navin Chaddha, is now president of the portal.


Chaddha assumes many of the responsibilities formerly held by Brett Prager, who surrenders the president's title, but remains chief executive officer.


Santa Clara, Calif.-based Rivio, with a reported $30 million in annual revenue, will make its proprietary business software applications available for sale on CPA2Biz and it will serve as the portal's application service provider.


It replaces Jam-Cracker Inc., whose Web-hosting may have come under fire because of reports of service breakdowns and technological glitches at CPA2Biz in recent months.


While CPA2Biz officials hail the acquisition as a major step forward, critics opine that the Rivio deal is a further indication of business troubles at the portal.


Rivio's key product, "Office Manager," is a Web-based suite of workflow and human resource management tools, including payroll processing, purchasing and procurement services and expense reporting that can be integrated with end-users' financial management software of choice.


In addition, Rivio also has delivery relationships with more than 150 third-party vendors of software and business services, which could theoretically be added to the CPA2Biz menu.


Prager said the CPA2Biz management considered five different companies before deciding to acquire Rivio.

Financial terms were not released, but it appears that CPA2Biz bought out the stakes held by some or all of Rivio's financial backers, which include venture capitalists Opportunity Capital Partners, Mobius Venture Capital and the venture unit of management consultancy Accenture. As part of the deal, Gary Rieschel, executive managing director of Mobius Venture, joined CPA2Biz's board of directors.


Prager said that adding Rivio's technology offerings "closes the loop" on a CPA2Biz operations plan that also included delivering the AICPA products and services, which the portal has been doing since its inception, and, offering financial services, which are now available via Capital Professional Advisors - a turnkey financial services program CPA2Biz acquired last year.


"With Navin Chaddha, we are getting someone who has operated some substantial  business, who can really help bring some organization and discipline to this organization," said Prager.


Chaddha, 30, has an impressive track record in Internet technology.


Prior to Rivio, which was formerly called Biztro, he co-founded VxTreme, an Internet media-streaming software company which he sold to Microsoft Corp. for $75 million in 1997. Microsoft appointed Chaddha as its chief technology officer, a post he held for about two and a half years.


He also co-founded another technology concern, iBeam Broadcasting, and serves on the advisory boards of several Internet start-ups, including Thinklink, OfficeClick and Bizfinity, a Cupertino, Calif.-based business software developer which has been marketing to CPAs.


However, critics say the deal thwarts CPA2Biz's ability to gain credibility with the CPAs it seeks to serve.


"This is just another sign of CPA2Biz moving further away from its own market," said Lou Grumet, executive director of the New York State Society of CPAs. The NYSSCPA has decided not to join the Shared Services Network of state societies that license their  respective member databases to CPA2Biz. "This latest event makes us proud of our decision."


Other observers have questioned whether CPA2Biz should provide vendors access to CPAs, whose lists it has obtained by virtue of its arrangement with the Shared Services Network. CPAs are considered a key way to deliver new products and services to small businesses as evidenced by the many technology companies building CPA channels, including the Internet-based NetLedger Inc. and Intaact Corp.


Chaddha acknowledged that access to CPAs was a major factor in his decision to sell to CPA2Biz.


"We realized that we had to build a channel to deliver our solution and CPA2Biz had the channel plus complementary management," he said.


Rivio delivers its programs to some 25,000 small businesses through marketing alliances with companies that have large numbers of small business end users. Those alliance partners, who integrate their customer service operations with Rivio's platform, include banking industry giants FleetBoston and Bank of America and telecommunications leaders, Verizon and BellSouth.


Chaddha also acknowledged being attracted to the merger because a weak market for initial public stock offerings has stalled his plans to take the three-year-old Rivio public.


On a more altruistic-sounding note, Chaddha said that joining forces with the CPA community will help him realize his original Rivio mission of "serving the neglected masses of 7.5 million small businesses by providing them with streamlined operations."


He also pledged to improve CPA2Biz's functionality. Without providing details, he said, "We are in process of taking stability of CPA2Biz to the next level. In the next six to nine months, it will improve substantially."


Prager and Chaddha acknowledged that CPA2Biz has had trouble gaining widespread acceptance in the CPA community, but they unveiled no specific strategy for mending fences. "There will always be some people who don't like (new) initiatives," Chaddha said.


One of the major sources of contention has been CPA2Biz's ownership structure, which includes a stake that was purchased by institute president and chief executive Barry Melancon.


The Rivio-CPA2Biz deal has not sent ripples through the electronic commerce market, however.


"This (the CPA market) is such a powerful channel that everyone is trying to corner it, so it doesn't surprise me that Rivio wanted to get added on (to CPA2Biz)," said Amy Levy, an analyst with Summit Strategies, a Boston-based analyst of electronic businesses.


"Just having the AICPA imprint won't mean that CPAs will run off to CPA2Biz for products for their customers," said Evan Goldberg, chief executive of NetLedger. "CPAs are trusted advisors and want to provide the best solutions possible for clients, so they will make decisions based on product merits."


Among those who hailed the Rivio-CPA2Biz deal is J. Clarke Price, chief executive of the Ohio Society of CPAs and chairman of the Shared Services Network. "This is definitely a positive - a nice suite that CPAs can use in serving their clients, and Navin Chaddha is experienced in the business-to-business space and with dot-com companies."


James Metzler, a Buffalo, N.Y.-based CPA and principal of ConvergenceCoaching, which trains in delivering technology services, said, "This gives CPA2Biz the technology core it's been trying to pin down for years."

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