A few days ago, I mentioned that I would try to explain my take on how Answers.Com fits into the Net Shepherd business plan. Well folks, here goes . . .
First off, why did idealab! sell Answers.Com to Net Shepherd?
Well as I understand it, Bill Gross (idealab!'s head honcho) had a lot of confidence that this business would / could be a success. He came to realize that his company did not have the technology or infrastructure to help it realize its full potential. They couldn't provide the service effectively without incurring significant costs. Well it appears that the over $7 million Net Shepherd had already invested in the development of their technology was well spent. For it seems that it has provided their company with the ability to efficiently and profitably offer this service. On top of this, I believe that their existing technology, (and the rest of the other business services they offered) could be used to provide a synergistic springboard that will take Net Shepherd into new areas. I pose that idealab! recognized this as well, and this is the reason why they took stock in Net Shepherd in lieu of cash. This way, idealab! still benefits when their business concept becomes a success.
Answers.Com's closest competitor is Ask Jeeves.Com. They currently are the leaders in this area. It provides a good service and is popular. My kids use this search engine. Now Ask Jeeves.Com must be popular because (as someone just informed me) their IPO was close to $100 million!
Now, I see an opportunity for Answers.Com to take a big piece of the potential market for this form of service. In my opinion, there is a great opportunity in the business to business market. I see them being able to provide their services and technology to organziations as a form of out sourcing service. Building onto the Answers.Com foundation, they could provide existing businesses with all forms of product support or research assistance to alleviate the burden many organizations face in this area. For many business, this is a burden and non value added. However, it is critical to the success of that organization's long term success in the market.
I see Net Shepherd being well positioned to offer their technology and search capabilities along with their small army of human researchers (currently estimated at 1,500 people with plans to reach 15,000 people) so that a client's organization ability to deliver service and support to their key customers will be exponentially improved. I also believe that this is one of the reasons why Dunn & Bradstreet is working closely with them. By the way, I just received an e-mail from Edgar On-line talking about their now offering access to Dun & Bradstreet reports. Here in part is what they say about D&B . . . "Dun & Bradstreet reports are renowned for the up-to-date company and credit information they provide on over 11 million U.S. businesses. The reports being offered through EDGAR Online are essential for evaluating a company's operations, profitability and stability."
Now if you remember that in an earlier post I mentioned where one of senior executive of D&B stated that they feel that Net Shepherd could save them millions! Well, I bet there is a tie in to Answers.Com here as well. Why not set up Answers.Com as a service that any business could contact to ask about another business who could be a potential supplier or customer? If the answer isn't in D&B's / Net Shepherd supported data base, then one or more of their support staff can dig for the information and provide it for them.
Now I want to emphasize that the above musings are just pure speculation on my part! But I have to tell you that this is one of the primary reasons why I am attracted to investing. You get to research, think, and strategize scenarios that you believe would be the most probable course of action for a business to take. I like doing this better than the game of Chess! Now, the real fun begins if you have invested money in the company's stock and you are correct! Being right often pays off handsomely.
For all of the reasons I have mentioned previously, I believe that this company has the potential for significant gains. I just hope that we all soon get the opportunity to see them realized.
Crazy Canuk |
