From today's Briefing.com
CyberCash (CYCH) : CyberCash is a good example of an internet company that is still searching for the right solution. They were one of the pioneers, introducing their first product all the way back in 1995. Briefing.com also started in 1995 and we have followed them ever since. It seemed in the beginning that a company like CyberCash was going to explode alongside the internet. They were going to be the credit card of the net. But all of the technology just never seemed to jive with what people really want. Even the company, in investor conferences, readily admits that their first product, which required downloading a large software "wallet" program was just too much for most consumers. The current product "InstaBuy" moved away from that by storing user credit card and shipping information on a CyberCash server, allowing a user to skip the "tedious process" of typing in order information. but it requires that the vendor have corresponding InstaBuy software on their server, software CyberCash charges for. They face a chicken-or-the-egg problem here, as vendors hesitate to buy until a lot of users register with InstaBuy, but users don't bother until they can actually buy something with InstaBuy. Now, CyberCash announces with NetGravity, a new internet approach, which essentially amounts to the net equivalent of the "impulse buy." The relationship will allow a user to click on a NetGravity banner ad, and be presented immediately with an opportunity to buy whatever product is up there, using the InstaBuy system. It is another interesting idea, but it isn't clear that this product will be the one to make InstaBuy widely accepted. Is impulse buying something that will work on the net? It hasn't yet, but buying anything is burdened with multiple clicks, then multiple page views, then filling out an order form. Even if you weren't thinking of buying something, the task of buying makes it, by definition, no longer an impulse buy. This new service is the first example we've ever seen of a true impulse buy. But that doesn't mean it will succeed. You first must register with InstaBuy, and the proper type of items need to be presented. In the non-internet world, the impulse buy market is dominated by low cost incremental items that are added to an existing purchase. This service would be, presumably, higher priced items than Wrigley's Gum, and be a sole sale, not an incremental sale. Is that what people want? It is the type of question that makes business fascinating, and it will be interesting to see what kinds of things are sold, or offered for sale, with this service, and whether it works. But don't buy the stock assuming the new service will suddenly add a lot to CyberCash's revenues. It might, but a wait-and-see approach is probably best, considering the long evolution process of CyberCash's previous products. Also, don't be fooled by looking at CyberCash's revenue streams that their internet product line is succeeding. CyberCash's acquisition of ICVerify, a credit card transaction processing service, still provides the bulk of their revenues. The "big internet product" for which the company was created, still hasn't happened. - RVG |
