Cents and Sensibility - Kimberly and Friends' Consortium Message Board

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Strategies & Market Trends : Cents and Sensibility - Kimberly and Friends' Consortium

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To: Kimberly Lee who wrote ()	4/17/2000 12:17:00 PM
From: M.Maker	of 108040

RNWK:/merrill lynch/aprill 14 2000 expecting a strong,potential upside from broadband infastructure services....(ACCUMULATE* investment highlights:\real networks will report Q1 2000 results on 4/18/00 at 5.00 ets. we axpect about 10% upside to our revenue estimate of 48million dollars. the company has a track record in making the following quarters revenue estimate. our eps estimate is $0.05,pre-goodwill. rnwk is 60%off its high$96 wich was achieved on 2/11/00. the curent price implies a 2001 price/revenue multiplex of 23x 2001 and price/gross profit multtiple of 28x gross profit. while market conditions have driven this correction,we belive the stock is being re reted as an emedia stock (which trades at 5-25x revenue) versus an e-infrastructure stock (40x + revenues). over 80% of revenues still comes from infrastructure software and services. and the companys recent push into broadband infrastructure services has the potential to accelerate the growth of streaming media. we think that ultimatly the company is among the best positioned to "minetize" the growth in audio/visual content on the web for both the b2b and media markets. we believe the catalysts for expanding multiple will be greater visibility on these fronts. they continued to say that they believe RNWK should be valued as an infrastructure compant. wE BELIVE THE CORRECTION HAS SLIGHTLY EXAGGERATED. OVER 80% OF REVENUES STILL COMES FROM INFRASTRUCTURE SOFTWARE AND SERVICES. the real.com family of websites is currently number 12 with reach of 17.1% (amazon number 8) (time warner number 9) (about.com number 10) (goto.net number 11)

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