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Technology Stocks : Compaq
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To: Windseye who wrote (67096)8/29/1999 3:41:00 PM
From: rudedog  Read Replies (1) of 97611
 
re: "How come if it's so good, and so obvious, CPQ didn't keep AV and do this itself?"

Look at the revenue picture for a minute - CMGI can do the typical internet business model and show user growth, penetration etc. without concern for the cost picture. CPQ, on the other hand, has a hard time justifying an investment of hundreds of millions with no return. That amounts to maybe 3-4 cents EPS on a quarterly basis. I'm sure that CPQ has a plan for using those million customers, and that the benefits will be far greater than any eventual revenue that AV might make.

I think CPQ did exactly the right thing - trade an asset that just hurt the bottom line for a business relationship with the potential to drive billions in revenue for CPQ.
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