Investors Meeting with Net Shepherd (continued)
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Answers.com
· Answers.com is using new technology together with a unique business process that will be very hard to duplicate. The NSI technology, combined with the Answers.com format, is what makes it unique and powerful.
· NSI has acquired Answers.com at a cost of 400,000 shares of Net Shepherd Inc.
· NSI does not consider Ask Jeeves (ASKJ) to be a competitor, as they will be going after the high end Fortune 1000 companies. ASKJ has been rumoured to charge some of their business customers as much as $500k as an initial fee to get them started. Answers.com will be targeting the Middle Market businesses, and charging an initial fee of $15 - 20k. Ask Jeeves doesn't have the same technology that NSI has. NSI believes that given ASKJ's infrastructure, if Ask Jeeves were to try to move into the Middle Market, they would find themselves at a disadvantage.
· NSI can take Answers.com into the arena of private labeling of services. They could easily work with a company's Intranet or Internet presence. They have sought out new companies who also have complementary technology that will strengthen their model. (Orbital - Scotland)
· The key to doing searches is based upon: how you get it; how fast it is done; and how inexpensively it is carried out.
· Through the use of NSI's community structure, Answers.com will be able to reduce the associated costs of responding to the requests for information. According to theStreet.com, Ask Jeeves has approximately 100 full time (specialized) researchers¹ who represent a significant overhead expense to the company. If they employ the same model as they expand their business, their operating expenses will grow substantially.
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¹ "Ironically, one of Ask Jeeves' supposed competitive advantages, its staff of 100 human editors, may be an Achilles' heel. 'They need to demonstrate that their editorial model doesn't become a bottleneck,' says Lusher, who notes that competing services may offer quicker, more automated solutions." - Ante, Spencer E., Ask Jeeves: What's the Big Deal?, theStreet.com, July 6, 1999.
· NSI's technology and community model will provide Answers.com with a huge cost and efficiency advantage over Ask Jeeves. NSI is using XML tags to pull specific information.
· Answers.com is raising $2 million in August and hopes to have an Investment Bank provide them with $25 million financing within the next few months.
· They will be issuing 12 million shares (equity).
–– One million of these shares will be for Bill Fogg (500,000 now, and the remainder upon the successful IPO).
–– Two million will be the PP.
–– The remainder will belong to NSI. The goal is to reach a valuation of $100 million at time of IPO, with a target date for this IPO is tentatively March 2000.
NSI wants to retain a majority ownership in Answers.com. They intend on using a Tier One firm, such as Paine Webber, to finance the difference.
I2B (Internet to Business)
· This is the second planned new business, which will be taken to IPO.
· They have identified several targets for acquisition as the foundation for I2B.
· Terms of share issuance will be similar to that of Answers.com
Potential Partners / Mergers and Acquisitions?
· NSI wants the right type of merger. They have determined that only 1 out of every 10 mergers work out. As a result, they are being extremely cautious and selective in their choices. They also feel that the management of an acquired company has to have a compatible culture.
Clickchoice.com
· Clickchoice is one of their partners and one of their biggest customers.
WEBB Interactive (Q.WEBB)
· NSI is looking at the possibility of doing a strategic alliance with WEBB². This could take the form of a mutual licensing of each other's technology.
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²Net Shepherd has since issued a Press Release announcing a joint-venture with WEBB: newswire.ca
· WEBB has made significant progress in the utilization of XML and currently has a large online community.
Nasdaq?
· The promise that NSI made at their Annual General Meeting with respect to a transition to Nasdaq is still being pursued.
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Denise. |
