Edgar Filing: BROADBASE SOFTWARE INC

Filed by Kana Communications, Inc.
Pursuant to Rule 425 under the Securities Act of 1933, as amended
and deemed filed pursuant to Rule 14a-12 of the
Securities Exchange Act of 1934, as amended.

Subject Company: Broadbase Software, Inc.
Commission File No.: 000-26789

Kana Merges with
Broadbase

Transforming Relationships
into Business

[LOGO OF KANA SOFTWARE]

April 9, 2001

Steve Robins
Director of Product Marketing

Kana Software

Vision

Introduction

Today's Announcement

Today, Broadbase Software has agreed to merge with Kana Communications,
combining to become Kana Software. This merger brings together two industry
leaders to form one of the largest companies in the eRM, Enterprise Relationship
Management space, offering the most complete solution for managing effective
relationships. The combined company will boast some 1,300 customers
concentrated in the Global 2000 as well as a blue chip list of business partners
including Accenture, Art Technology Group, Aspect, BEA Systems, BroadVision,
CSC, Cisco, Deloitte & Touche, EDS, Hewlett-Packard, IBM, Intershop, KPMG,
Nortel Clarify, Perot Systems, and PWC.

Kana Software - eRM for Today's Real Businesses

In contrast to old economy "CRM" vendors, Kana Software is moving beyond
traditional CRM solutions. Kana's vision for eRM is to build and maintain
profitable business relationships with customers, partners, suppliers, and
employees - all of a company's key stakeholders. Engaged at each stakeholder
touchpoint - service, marketing, and commerce, eRM helps companies to increase
profitability by nurturing long-term business relationships. Relationships that
continually engage, satisfy, and delight stakeholders - yielding greater
loyalty, increased revenues, more effective use of service and marketing dollars
- and ultimately, higher profitability. Kana is defining eRM - Real business,
real problems, real solutions - that lead to real results and real profits.

Leading eRM Solutions

This merger forever changes the landscape of relationship management, bringing
together leading eRM solutions - customer-endorsed and with top market share.
Among others, these include the Kana eRM Platform (formerly the Kana eBusiness
Platform); Kana Response, the industry's most advanced e-mail management
solution, Kana Service contact center and cross-channel workflow solution;
Broadbase Knowledge Server for employee and customer guided access to key
information; Broadbase eMarketing suite, for automated customer interactions;
and Broadbase analytics for marketing, commerce and service.

"The days of customer service operating in a stovepipe function - independent of
sales, marketing and e-commerce - are nearing an end for all but the slowest
adopters of strategy and technology"

Gartner Group, March 2001

"As firms deploy new touchpoints, integration lags and business goals suffer. A
new type of software will centralize customer knowledge, enabling firms to
interact seamlessly across all channels"

Forrester Research, October 2000

Challenges Today

As companies strive to increase profitability by strengthening relationships,
they face a variety of challenges. These include:

. Meeting increased customer expectations for better quality business
relationships to drive loyalty.

. Driving down the costs of providing quality service.

. Disconnected communication channels.

. Un-integrated departmental views of the customer.

. Declining business process efficiency with customers, partners, and
suppliers.

. Inability to quickly respond to changing business conditions.

. Running the business with point and departmental solutions that cannot solve
global mission-critical problems.

. Attempting to adapt CRM solutions to eRM systems - which effectively puts a
web interface on systems that cannot scale for the web.

. Ineffective, untargeted interactions that waste financial and other
resources.

. One-sided relationships that benefit only the company and do not build
loyalty.

More than ever, in today's competitive and challenging economy, companies must
continually harvest relationships - to maximize the value of each relationship.
And they must stay close to their customers - understanding and then quickly
responding to customer needs in a changing market. To do all of this, companies
need to be able to deploy eRM systems in an incremental fashion that adds up to
a cohesive and integrated whole.

Kana Software's eRM solution helps companies to thrive and succeed in this
challenging environment by delivering an integrated and robust system that
manages all stakeholder interactions, driving down expenses, and increasing
revenues.

Enterprise Relationship Management, eRM

What is eRM? eRM or Enterprise Relationship Management, is based on business
relationships. The best, longest lasting relationships are mutually beneficial,
a win/win for the company and for the customer, partner or employee. Strong
relationships are built by both or all parties, not "managed" by one party for
their own benefit. Good relationships take into account, and meet the needs of,
both parties. And relationships apply to everyone that your company touches -
partners, suppliers, employees and customers - the stakeholders that make up
your extended enterprise.

Now, if you can actually improve those relationships, you can improve customer
and partner loyalty, supplier collaboration, and time to market. You can
improve the success rate of marketing and partnership efforts and grow revenue.
And you can run your operation more efficiently and reduce costs. Finally,
better business relationships help your company to become more profitable.

eRM helps companies to build relationships throughout the extended enterprise.
Enterprises are abandoning a company-centric approach where only the company's
staff are empowered, and relationships with customers, partners and suppliers
are only loosely linked. Today, enterprises are shedding non-core functions and
relying on partner and supplier expertise to provide these functions, creating
an Extended Enterprise business model. In the Extended Enterprise, customers,
partners, and suppliers - stakeholders - are vital to the enterprise's success
-- which means business relationships become mission-critical. The eRM solution
enables enterprises to build relationships in which participants inside and
outside the company walls are equally important, equally empowered, and tightly
coupled.

eRM Requirements. In order to be successful, an eRM system must encompass the
marketing, commerce and service activities of the enterprise. The eRM system
must leverage intelligence, must enable global views of information about the
stakeholders, must include integrated communication channels, and support
multiple methods of interaction that include proactive service, self service,
assisted service, virtual assisted service, and an extensible platform.
Companies also need to be able to simultaneously unify and extend solutions
across marketing, commerce and service through a common platform that provides
flexibility, extensibility, scalability, and security. Kana Software enables
all of this.

CRM versus eRM

Traditional client-server CRM (customer relationship management) software
solutions have failed to meet the challenges described above. Why?

. Internal-only focus. CRM, like ERP (Enterprise Resource Planning), focuses
on internal efficiencies using a record-and-report design, but does nothing
to help customers, partners, and suppliers be self-sufficient, to actually
resolve problems on their own, to participate in the overall business
process, or to engage in a personal dialog with the company.

. Restricted communications. CRM usually relies on costly and time-consuming
interaction methods that are often limited to in-person or agent-assisted
telephone communication - and does not provide communication choices for
24/7/356 business.

. Fragmented systems. CRM solutions, based on old client/server technology,
typically solve one departmental pain point at a time with isolated
applications. Essential stakeholder, interaction, profile, and activity
information gathered by different front and back office applications is
fragmented, isolated, and inaccessible across departments, resulting in
missed marketing interactions, commerce activities, and ROI opportunities;
skyrocketing costs through duplicated efforts; and customer dissatisfaction
due to inconsistent treatment across business functions and channels.

. Inflexible architecture. Client/server CRM software is built on a rigid
architecture that is incapable of scaling to support large and exponentially
increasing numbers of users, cannot incorporate external users in the
business process, and cannot adjust easily to changing business conditions.

. Inability to improve operations. Because they lack analytical intelligence,
CRM systems cannot promise better customer relationships. These systems lack
the ability to understand and then improve marketing, commerce and service
interactions through analytics.

CRM and eRM

The graphic consists of a table, as follows:

Dimension CRM eRM
-------------------------------------------------------------------------------------------------------------

Technology
---------------------------------------------------------------------------------------
Architecture Client/Server; Web;
Rigid Extensible
---------------------------------------------------------------------------------------
Scalability Limited High
---------------------------------------------------------------------------------------
Process Tracking Solving/Interacting
-------------------------------------------------------------------------------------------------------------
Emphasis & Scope Departmental Enterprise & beyond
Focus ---------------------------------------------------------------------------------------
Analysis Limited Extensive
---------------------------------------------------------------------------------------
People Internal/Employees Employees
Customers
Partners
Suppliers
---------------------------------------------------------------------------------------
Financial Reduced Increased
Expenses Revenues
-------------------------------------------------------------------------------------------------------------
Examples Siebel Kana
Peoplesoft Vantive
-------------------------------------------------------------------------------------------------------------

The following chart contrasts the differences between CRM and eRM. CRM covers
only internally facing employee applications while eRM embraces and improves
interaction and relationships throughout the extended enterprise.

ERM Serves the Entire Extended Enterprise

The graphic consists of four circles across the page, each one intersecting the
circles on either side, in three venn diagrams. Each circle is labeled, moving
from left to right as follows: Suppliers; Back Office--Manufacturing, Finance,
Engineering; Front Office--Sales, Support/Service, Marketing; Customers.
Superimposed over all four circles are the words "Extended Enterprise." Over
the intersection of the first two circles is the word "buy." Over the
intersection of the second pair of circles are the words "Make/Add Value." Over
the intersection of the third pair of circles are the words
"Market/Sell/Service." Under the second circle are the words "ERP Transaction
systems." Under the third circle are the words "SFA Trouble tracking (CRM)."

Kana Software: Defining the Next Generation of Relationships

Kana Software empowers organizations with a single, global view of customers,
partners, suppliers and employees to provide insight and immediate action across
every touch point. By managing each customer interaction with one integrated,
extensible eRM platform, Kana Software will enable companies to deploy a
solution where customer insight and operational action become one - changing the
landscape of the market permanently.

Kana Software's vision for eRM is to build and maintain profitable business
relationships with all of a company's key stakeholders. Engaged at each
customer touchpoint - with intelligent service, marketing, and commerce, eRM
helps companies to increase profitability by nurturing long-term business
relationships - yielding greater loyalty, increased revenues, more effective use
of service and marketing dollars - and ultimately, greater profitability.

Kana Software's solution spans across marketing commerce and service - the three
pillars of eRM. In this way, companies can base all of these activities on an
integrated view of the business - enabling better interactions, a continuous
dialog with customers, and much more. Further, the Kana Software solution is
based on multiple solution layers that include:

. A Common Data Integration Layer that stores all information about
stakeholders, enabling interactions that span multiple communication
channels, comprehensive analysis across all activities and the ability to
deliver relevant, context-sensitive information to all stakeholders.

. Analytic Layer that enables companies to more fully understand the extended
enterprise including stakeholders - customers, partners and employees - and
operations. These action driven analytics drive more effective interactions.

. eRM Platform Layer leverages a single set of business rules and a universal
workflow throughout the enterprise. Companies today are challenged because
they often run separate systems each with their own business rules, separate
administration and reporting - making them increasingly difficult if not
impossible to manage. Kana Software solves this problem by unifying all of
this information onto a single robust platform.

. eRM Application Layer provides leading edge packaged eRM applications for
commerce, marketing and service - including marketing automation, contact
center apps, e-mail response, live collaboration, self service,
personalization and commerce and more. These applications leverage the best
practices and experience of hundreds of customers, enabling solutions that
are at once flexible, powerful and rapid to deploy.

Complete eRM System
Kana Solution Architecture

The graphic consists of five rows, with each row representing a layer. The
first row represents the Communication Layer, which consists of: E-Mail, Phone,
Web, Chat, VoIP and Wireless. The next row represents the Application Layer,
which consists of Service and Sales & Marketing. Under Service, there are the
following: Agent Portal; Case Manager; Self-Service Knowledge; Assisted-Service
Knowledge; E-Mail Response; and Live Collaboration. Under Sales & Marketing,
there are the following: Portal; Marketing Automation; and
Personalization/Recommendation Engine. The third row represents the ERM
Platform, which consists of Customer Profiles; Application Extensions; Workflow
Engine; Real-time Optimization; Knowledge; Accounts; Application Extensions;
Campaign Management; Events; Contacts; Content; and Data Objects, all over XML
Messaging. The fourth row represents the Analytic Layer, which consists of
Service, Sales and Marketing. The fifth row represents the Data Integration
Layer, which consists of ETL, Deduplication, Data Mining, ROLAP Engine,
Analytics Server and Analytical Data mart, all over Analytic and Operational
Adapters.

Kana Software - Applications and Modules

Kana Software provides a complete solution including:

. Contact center - case management - a complete solution for managing contact
center activities. Provides case management capabilities, and extranet
workflow for complete, high-quality service at lower cost.

. CTI Conduits - enables integration to CTI systems.

. Customer Portal - Personalized web page that provides a customer-centric,
user-controlled view of the world and the company in particular.

. Agent Portal - Common desktop that enables agents to view all customer
interactions across all communication channels, enabling effective and
continuous dialogs.

. Self service access to knowledge base - Using our Expert Reasoning(TM)
methodology, Self Service interactively guides end users by narrowing down
options until it pinpoints the right answers within a knowledge base of
proven advice.

. Agent assisted knowledge base access - enables agents of any skill level to
quickly locate the information they need to assist customers.

. E-mail response - assisted service with fast, intelligent, automated e-mail,
Web, and instant messaging request management. E-mail response delivers a
high performance,

inbound response management solution for efficiently managing e-mail, Web,
and I-Mail interactions.

. Live collaboration, text chat and VoIP - allows real time live interaction
over the Internet, letting customers and agents converse via chat using a
second phone line, voice over IP, or instant messaging.

. Outbound e-mail- Deliver high-volume targeted, personalized electronic direct
marketing campaigns to increase the lifetime value of customers.

. Marketing automation - automate the planning, management and execution of
strategic marketing programs such as customer acquisition, cross-sell, up-
sell, and customer retention campaigns. Deliver continuously executing,
multi-step, multi-offer campaigns delivered via e-mail, fax, web, direct mail
or call center.

. Real-time web personalization - analytic and real-time recommendation
application that helps e-businesses interact more effectively with customers
over their web site.

. Business Analytics - enable companies to leverage the powerful information
locked away in legacy transaction systems and provide a complete view of
customer, partner, supplier and employee interactions.

Kana Software Spans All Relationships

The graphic consists of a graph. Along the vertical axis are: Marketing,
Communications, Customer Service and Sales. Along the horizontal axis are
Internal (Employee), Partner and External (Customer). Across the top of the
graph is an ellipse labeled "Knowledge/Analytic Infrastructure." Under that is
another ellipse labeled "Communications/Interactions." Under that are four
circles: the left one is labeled "CRM." There are two on the left, one over
the other. The top one is labeled "E-Service." The bottom one is labeled "E-
Sales." The circle in the middle is labeled "PRM."

The graphic is the same as the graphic described above, with the addition of the
Kana logo superimposed over the graph.

The Kana Software Advantage

Kana Software is changing the way that enterprises interact with customers, the
way they build relationships, and the way they run their businesses. We help
companies to drive costs down, increase revenues in a cost-effective manner, and
to ultimately drive greater profit growth. Kana enables companies to increase
the effectiveness of all interactions and relationships through intelligence -
an understanding of the business and all its stakeholders. We enable a
continuous, meaningful dialog between the company and its stakeholders -
consistent, personal and timely across all communication channels. We enable
the most comprehensive view of the business - a single view that encompasses all
interactions of partners, customers and employees. We deliver a solution that
enables effective communication throughout the extended enterprise - for
partners, suppliers, customers, employees - virtually anyone that touches your
company. And finally we

help companies to achieve outstanding ROI by enabling revenue growth, greater
scalability, enhanced employee productivity, and cost avoidance. Let's examine
each point in turn.

Kana Software increases the effectiveness of interactions and relationships
through intelligence, which is composed of analytics and knowledge. One of the
biggest challenges that companies face today is ineffective customer
interactions that drive down revenues and profits - resulting from under trained
customer service agents, information that is too complex to locate, disparate
information, poorly targeted marketing campaigns, and more.

For that reason, Kana Software enables companies to leverage the two components
of intelligence - analytics and knowledge. Business Analytics help companies to
analyze and better understand their customers and their service operations. In
this way, companies can drive more personalized, context sensitive and relevant
communications based on complete knowledge of the customer, partner or employee.
Further, these action-oriented analytics drive more targeted, more effective
interactions that build stronger, longer lasting, profitable business
relationships.

And knowledge - stored in Kana Software's powerful yet easy to use knowledge
base - enables each interaction to be as if it was with your company's best
employees. The Kana knowledge base guides customers, employees, partners and
customer service agents through the same process that your best agent would use
- while adjusting to the needs of the user. In this way, each CSR can be as
effective as your best. And each customer or partner can have the same
experience that they would have if they were talking to the best CSR.

Continuous, personalized dialog that engages stakeholders in an ongoing,
continuous, seamless discussion that builds lasting, profitable relationships.
Kana Software enables a continuous dialog, an integrated business experience
that spans service, marketing, and commerce, and extends outside the enterprise
to incorporate customers, partners, and suppliers in collaborative business
processes. Kana Software's solution integrates all of the communication
channels and interaction methods, as well as business processes to manage the
entire customer lifecycle -- from helping customers, partners, and suppliers to
find the right product, service, and information - managing complex service
requests to marketing to those customers.

For customers, partners, and suppliers, the continuous dialog means they can
conduct business activities without needing to know whether the activity is the
responsibility of the marketing, commerce, or service department. And the
continuous dialog enables customers, partners, and suppliers to fully
participate in business processes, creating collaborative relationships that
yield greater customer satisfaction and loyalty.

By integrating and sharing information and processes across departments, the
enterprise can deliver precisely targeted marketing campaigns, increase up-sell
and cross-sell opportunities, and ensure consistent and personalized treatment
for every customer,

partner, and supplier. In addition, the enterprise increases efficiency and
lowers service costs by automating and extending business processes across and
outside the organization.

Kana Software enables a global view of customers, partners and employees -
across all interactions. Imagine a service interaction triggering a more
effective marketing interaction. Imagine having 100% visibility into all
operations and all stakeholders - and being able to use that information to
drive better interactions. Well, Kana Software's global view enables just that.

Kana Software provides a unique global view that consolidates all information
about stakeholders, their interactions, and activities into a virtual
"centralized" repository for realtime use - as well as a historical analytical
system. Information captured in eRM applications and other enterprise
information sources can become part of the global view. Personalized Web portals
deliver this global view with the right information at the right time. For
customers, partners, and suppliers, the global view facilitates business
collaboration, provides relevant information, and allows control over business
interactions. And for the enterprise, the global view provides insight into
every business relationship across departmental functions and communication
channels so that any employee can deliver relevant offers and provide consistent
service. At the same time, because customers can resolve business issues
without assistance, the cost for building business relationships is lower.

Kana Software enables effective interactions throughout the extended enterprise.
As interactions spread from internal-only to interactions throughout the
extended enterprise - and encompassing partners, customers and employees,
companies must migrate to ultra-scalable, always on systems. Global 2000
companies today demand the reliability of a platform and the scalability of web
based systems. Kana Software delivers both.

The foundation of the Kana Software eRM suite is the Kana eRM Platform, formerly
the Kana eBusiness Platform. This platform delivers a standards-based Web
architecture for information, process, and application integration so that the
enterprise can integrate information and processes across marketing, commerce,
and service. Kana supports EJB/J2EE(TM), XML and a Java client for maximum
scalability, flexibility and rapid time to deployment and ROI. It delivers GUI-
based tools to build business applications that model the enterprise's policies
and procedures; as well as shared components for rapid adaptation to business
growth and change.

The enterprise can speed its time to market and improve its ability to respond
to business change using the foundation's shared, reusable components that
facilitate rapid application development and deployment. The enterprise
benefits from industry-standard, open technologies that integrate information
and processes spread across the organization. The enterprises can integrate
existing databases, legacy applications, and systems to create a virtual
"centralized" information repository so that the organization

can more effectively market, sell, and service its products and services. And
the enterprise can take advantage of the Web architecture's scalability and
flexibility for quick response to rapid growth.

Kana Software delivers proven ROI. Global 2000 companies use our software to
increase employee productivity, avoid costs, build more effective interactions
that drive revenue, ensure greater, more cost-effective business scalability and
more. Examples:

. Productivity. Kana Software Solutions helped Alta Vista to double CSR
productivity at the same time reducing CSR headcount by 20% even as the
business expanded and user traffic increased.

. Cost Avoidance. Kana Software solutions enable Verizon to avoid some $6
million in service costs per year through our self service systems.

. Scalability. Kana Software solutions have enabled Cisco Systems to increase
the number of simultaneous marketing campaigns from 150 to 500 - increasing
effectiveness without increasing staff.

. Revenue Growth. Kana Software solutions have helped the international arm of
Hewlett-Packard to increase reseller and partner revenue by 250% and reduce
channel switching by 100%

. Profitability. Kana Software solutions have helped ditech.com, the online
direct mortgage subsidiary of General Motors, to earn $1.2 million in profit
on their first marketing campaign - even as they decreased campaign planning
and design to 1-day cycle time.

. Rapid Time to ROI. Kana Software solutions have helped Bertelsmann Services
Inc. to customer agents to respond to 90% of all inquiries within 4 hours,
increasing customer satisfaction. Based on increased CSR efficiency, the
system paid for itself within 3 months.

Conclusion

Kana Software enables a new breed of business relationship management based on a
deep understanding of all aspects of the enterprise, the extended enterprise and
the stakeholders that make up both - customers, partners, suppliers, and
employees. We have brought together some of the industry's most powerful
applications to enable companies to seamlessly interact with stakeholders -
continuously in a personalized, relevant manner that builds lasting profitable
relationships.

Kana Software. Transforming relationships into business.

Additional Information and Where to Find It

Kana Communications plans to file a Registration Statement on SEC Form S-4 in
connection with the merger, and Broadbase Software expects to mail a Proxy
Statement/Prospectus to stockholders of Broadbase Software containing
information about the merger. Investors and security holders of Broadbase
Software are urged to read the Registration Statement and Proxy
Statement/Prospectus carefully when they are available. The Registration
Statement and the Proxy Statement/ Prospectus will contain important information
about Kana Communications, Broadbase Software, the merger and related matters.
Investors and security holders will be able to obtain free copies of these
documents through the Web site maintained by the U.S. Securities and Exchange
Commission at http://www.sec.gov. Free copies of the Proxy Statement/Prospectus
and these other documents may also obtained from Broadbase Software by directing
a request through the Investor Relations portion of Broadbase Software's site
Investor Relations Department, 500 Broadway, Redwood City, CA 94063.

In addition to the Registration Statement and the Proxy Statement/Prospectus,
Kana Communications and Broadbase Software file annual, quarterly and special
reports, proxy statements and other information with the Securities and Exchange
Commission. You may read and copy any reports, statements or other information
filed by Kana Communications and Broadbase Software at the SEC public reference
rooms at 450 Fifth Street, N.W., Washington, D.C. 20549 or at any of the SEC's
other public reference rooms in New York, New York and Chicago, Illinois.
Please call the SEC at 1-800-SEC-0330 for further information on the public
reference rooms. Kana Communications' and Broadbase Software's filings with the
SEC are also available to the public from commercial document-retrieval services
and at the Web site maintained by the SEC at http://www.sec.gov.

Interests of Certain Persons in the Merger

The directors and executive officers of Kana Communications and
Broadbase Software have interests in the merger, some of which may differ from,
or may be in addition to, those of Broadbase Software's stockholders generally.
A description of the interests that Kana Communications and Broadbase Software's
directors and executive officers have in the merger will be available in the
Proxy Statement/Prospectus.

Solicitation of Proxies

Kana Communications, its directors, executive officers and certain other members
of its management and employees may be soliciting proxies from Kana stockholders
in favor of the merger. The directors and officers of BroadBase Software may be
deemed to be participants in Broadbase solicitation of proxies. Information
concerning the participants will be set forth in the Proxy Statement/Prospectus
when it is filed with the Securities and Exchange Commission.