Received this email from the Company today.
For Your Review, Avaterra.com (OTC/BB-AVAR) is featured by Mark Stone in the Mark Stone Report. The article can be found at the following web site investorlinks.com -the article in its entirety is as follows.
The Mark Stone Report
Contributed by: Mark Stone
Avaterra.com (OTC BB: AVAR) Designing a New Internet Identity
If the Internet is a playground, Avaterra.com (OTC BB: AVAR) may be your sandbox. Create a new identity and have fun? Or, is there more to this George Lucas-Fujitsu creation that we should know about? Avaterra.com spent the summer sliding down the reverse merger chute and is now showing technical signs of a potential turnaround.
Internet Advertising as Interactive Infomercial? That may be one way to describe what Avaterra.com appears to be producing. This Fujitsu spin-off, now trading over-the-counter, appears to be growing at a pace of 80% monthly, according to CEO David Andrews, and that might soon convert into millions of
user hours each month. It used to be called WorldsAway and has been featured in numerous magazines, before it went through a reverse merger to become Avaterra.com.
The original concept came from George Lucas in the early 1990's was refined by Fujitsu, which brought it home to Japan. It's been popular over there for the past three years. Fujitsu spent at least $20 million adding to the Lucas Arts Entertainment concept, but didn't want to market it in the US. Andrews, who consulted to Fujitsu and reported directly to a board member, led the charge to take over the asset. The asset being the licensing of what Fujitsu created for use outside of Japan (Fujitsu currently runs the Japanese website and charges subscribers about 500 yen monthly). Fujitsu still owns 10% of Avaterra.com and
holds one board seat.
Andrews told us, "Several new zones are being launched." A visit to the website, www.avaterra.com, shows several zones and clubs within zones. The website is "all about community," Andrews tells us and that is probably the most frequently used word in his vocabulary - community. Two of the more popular
club zones are for minorities and disabled; another major zone is owned and managed by the gay & lesbian community. All of these numbers add up and the sun never sets on the Avaterra.com communities, which appear to be active as the world turns.
What is it really beneath the glossy covers? The Avaterra.com concept is about using self-created cartoon-like characters to represent oneself in an Internet chat universe. There are zones, just like there are categories for message boards. Instead of creating a phony name to use on a message board, you customize an "avatar," from about 2 million different choices. Avatars interact among themselves in different ways.
For the lonely, secluded, out-of-touch, disabled, and possibly demented, this appears to be an excellent way in which to create an identity to escape from one's own. Demographics skew 18 to 34 years old and Andrews claims around half are female because of the website's policing capabilities that toss out miscreants stalking women. Because of the fun and games people are having on the website, Andrews calls it one of the "stickiest" websites around and claims that the average user stays on the site about 3 hours. That makes it a niche advertiser's dream and perhaps Avaterra.com might get around to exploiting that advantage.
Right now, they are not taking advertising, but plan to do so soon. The advertising they hope to sell revolves around the "Ad Objects," featured on the website. Avatars (you and me pretending we are someone else) play with different "ad objects," which can include a can of Pepsi or a bag of Fritos or a
cup of Maxwell House coffee and so forth. The company also plans premium events, which may include celebrities and well-known musicians. It would seem natural that there might be something like a Madonna-chat (probably someone else, though) where the celebrity offers himself/herself to a crowd of avatar-admirers or even a company sponsored music festival. Because of the stickiness, the advertising would become more of an low-key infomercial, if that ambitious. Imagine a movie star having a can of Pepsi in every scene. That is the kind of advertising Avaterra.com appears to plan on offering - non-intrusive ads that appear in every frame and which the avatar "plays" with. Might be worth thinking about.
Financially, the company hopes to bring in more than $5 million in revenues in year one and, if some things go according to plan, year two revenues might jump to $40 million or more. Some of things-going-according-to-plan might, as some rumblings have it, include a company crossover from consumer-oriented Virtual Zones to corporate-to-consumer, or possibly corporate-within-corporate, Virtual Zones. There are said to be discussions with several financial websites and a number of corporations. Such deals could bring Avaterra.com some very solid revenues in this fiscal year and next.
If it weren't for the Fujitsu connection, Avaterra.com might well be ignored until next year - when the company, out of necessity, refines its focus. However, having a Fujitsu board member and subsequent connections within the electronics might open doors that would otherwise be closed. We look for such positive surprises in the fourth quarter 1999 and early next year. They may come sooner than we earlier expected based on the technical indication on Avaterra.com's stock chart.
Technically, the stock has retraced from a $3-7/8/share low and is trading around $4.50/share. MACD and Stochastic indicators show a reversal is in progress. That is unusual because Avaterra.com shares have moved slightly higher while the NASDAQ has been dying on us during this same six-day period. That is generally a sign of "news-on-the-way" in a microcap stock like Avaterra.com.
¸ 1999 by The Mark Stone Report. The Mark Stone Report consists of primary and independent research into the markets: fundamental research of small cap stock opportunities and technical research for trading opportunities in NYSE & NASDAQ stocks and stock indices. This is not a solicitation or offer to buy or sell securities mentioned herein. No recommendations are made to buy or sell the securities mentioned herein. Trading in securities may not be suitable for all individuals and involves the risk of all or part of your investment. Consult your broker or other professional to determine your suitability. Information included in this article, while considered to be accurate and reliable, is not guaranteed as such. |
