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Technology Stocks : MPPP - MP3.com

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To: SteveG who wrote (219)7/20/1999 6:09:00 PM
From: mbeach  Read Replies (2) of 1116
 
Steve,

I don't disagree with the explicit points you have made. True, mp3.com does not own the MP3 technology or any other technology as far as I know. You are also correct in that anyone can create yet another web portal site dedicated to MP3 format music downloads, but there is value in being the first and the largest.

What is less clear to me is the significance of these points. Actually, I doubt that MP3.COM is even constrained to the MP3 format although the irony of supporting others is not lost on me. This could be viewed as an advantage. As far as I know there is nothing preventing them from supporting other formats such as Liquid Audio should there be a market demand for these formats. A technology player such as Liquid Audio on the other hand has bet the farm on their technology gaining broad acceptance - where is betamax today!? The music download format battle is not over by any means.

MP3.COM will succeed or fail on their ability to create a portal that provides value to their intended audience and continues to draw web users which will drive their advertising revenue.

Granted this is a different business model than that of a technology provider, but it is a model which has enjoyed at least the short term favor of investors. The long term prospects for such ventures I agree is less clear.
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