Once the seventh largest company in America, Enron was formed in 1985 when
InterNorth Natural Gas acquired Houston Natural Gas. The company branched into many
non-energy-related fields over the next several years, including such areas as Internet
bandwidth, risk management, and weather derivatives (a type of weather insurance for
seasonal businesses). Although their core business remained in the transmission and
distribution of power, their phenomenal growth was occurring through their other
interests. Fortune Magazine selected Enron as "America's most innovative company" for
six straight years from 1996 to 2001. Then came the investigations into their complex
network of off-shore partnerships and accounting practices.
In 1989, Enron started trading natural gas commodities and eventually became the
world's largest buyer and seller of natural gas. In the early 1990s, Enron became the
nation's premier electricity marketer and pioneered the development of trading in such
commodities as weather derivatives, bandwidth, pulp, paper, and plastics. Enron invested
billions in its broadband unit and water and wastewater system management unit and in
hard assets overseas. In 2000, Enron reported $101 billion in revenue and a market
capitalization of $63 billion.
In November 1999, Enron launched EnronOnline. Conceptualized by the company's
European Gas Trading team, it was the first web-based transaction system that allowed
buyers and sellers to buy, sell, and trade commodity products globally. It allowed users
to do business only with Enron. At its peak, over $6bn worth of commodities were
transacted through EnronOnline every day.
EnronOnline went live on November 29, 1999. The site allowed Enron to transact with
participants in the global energy markets. The main commodities offered on Enron
Online were natural gas and electricity, although there were 500 other products including
credit derivatives, bankruptcy swaps, pulp, gas, plastics, paper, steel, metals, freight, and
TV commercial time.