InfoSpace (INSP): Where GNET went! Message Board

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Technology Stocks : InfoSpace (INSP): Where GNET went!

INSP 86.37

-0.5%

Nov 14 9:30 AM EST

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To: levy who wrote (7783)	6/21/1999 2:18:00 PM
From: NotNeiderhoffer	Read Replies (2) of 28311

rl, Dunno exactly how they prevent this from happening but I am sure that their take per transaction will be fairly small and probably not big enough to push people into circumventing the "royalty". HyperMarts cut will be small but hopefully all the transactions add up to a meaningful slice for GNET. Offering the end to end solution including the final one, ie payment, should put them in front of some type of cash stream and the whole deal offers tremendous operating leverage given that they won't have to necessarily hire a bunch of people or invest up front in hardware and other technology given the scalability of the current architecture. At this point I think the near term focus of GNET investors shifts to the whole broadband side of the story... I was at the Bear Stearns conference last week and sat in on Excite@Home's presentation. I think the main presentor was Ken Goldman, CFO who desperately needs to go to remedial public speaking lessons at Dale Carnegie. He is NotRuss by any means. Keep in mind that GNET (think content and ad revenue/recurring fee revenue and soon subscriber revenue) and HSAC (think fat pipe/backbone) offer up what Excite (ad revenue/content) and @Home (monthly subscription fees/backbone) offer. He outlined a financial model that once you adjust for small differences in accounting sounds awfully familiar to GNET's (or vice versa since they were there first), with gross margins and operating margins in line with what Russ H. ourlined in NYC and a similar revenue split in terms of advertising/recurring fee sources from the excite side of things and the rest coming from the monthly fee @Home subscribers pay. The @home dude mentioned that they can't gain market share by just offering high speed access but must continue to add content and must provide value to subscribers to justify their share of the monthly split (ie the $40 monthly subscription fee is split roughly 75/25 @home/cable co I think). This split of the revenue is already becoming controversial because the cable co's are claiming they need more of the split given the heavy spending they are looking at the next few years to upgrade the cable infrastructure around the country. Then there are a million other issues, from the Portland judicial decision and things such as the customer service skills that cable co's lack and so on... He also mentioned that Excite@home is currently getting 50% of their new subscribers from AOL deserters and 5-7% from other ISP's with maybe the balance being new net devotees. I can't remember as it has been a few days and my rapid fire notes are garbled as usual. They are up to about 600,000 subscribers and are adding new ones as soon as the cable plant is upgraded and they can market the service. In addition I think that ATHM has fairly exclusive rights to their current customers to provide service until 2002. At that time things are up for renewal and it could get interesting. After all, who holds the cards?-the cable co's have the distribution. I am very curious to see what kind of revenue split Charter works out with GNET and HSAC. Perhaps some of this has been talked about but I have not had a chance to review everything since the deal closed last week. I can tell you that we should cheer every time Charter adds a cable property as that adds more potential GNET broadband subscribers who can be booked as revenue down the road. NotlongATHMbutstartingtodosomeduedillyonittobetterunderstandwherewemightbegoingNeiderhoffer

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