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Technology Stocks : Digital Island,Inc - (Nasdaq- ISLD)
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To: LJM who wrote (119)7/14/1999 5:12:00 PM
From: David Lee  Read Replies (1) of 1884
 
Well, I've never met anyone from Digital Island, but I've met the network engineers at one of their clients, and they seem to really like it. I've also spoken to engineers at Exodus, and (if I remember correctly) for the most part their entire network is put together using industry standard stuff from Cisco. This isn't to say that their network is "exceptionally good" -- Cisco simply makes the best stuff.

Personally, I would doubt that Digital Island has any real techincal advantage over Exodus. But then again, I haven't had the opportunity to talk to anyone from ISLD.

Also -- peering is when you connect directly to someone else's backbone. For example, if Digital Island and Mindspring have a peering relationship then all traffic coming from Digital Island hosted applications jumps directly onto the Mindspring network instead of going through the public internet exchange points. Peering allows things on the internet to go much faster.

As far as valuations go: ISLD should be $21.45 against today's EXDS close (using 6-month trailing revenues). A friend said that using 2000 projected revenues, ISLD would be fairly valued at at 35.

Personally, I am just position trading ISLD right now...but if the volumes continue to trail off, I'll probably move on to something else. ISLD's low float make it a very fun stock to trade! This is not to say that ISLD is not a great investment, but i prefer to invest in the market leaders -- and EXDS is the leader hands down.

Later,

Dave
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