Steve speaks:
e-harmon.com's
NetStock! by Steve Harmon
ceo of e-harmon.com
e-harmon.com
"for the internet investor"
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1999.11.10 BackWeb coming front and center?
BackWeb (BWEB) shares finally popped 32 percent yesterday. This is a stock
I've been touting since its low of $15 per share, and a company that I've
followed since its CEO, Eli Barkat, showed me the alpha of BackWeb on a
laptop in 1996, when the company had a few employees.
At north of $40 per share I still think BWEB has some room to keep going.
The richness of its technology attracts me - the ability for BackWeb to
dynamically provide ecommerce data services.
Few firms, if any, fully exploit what BackWeb's data delivery can do. As
Barkat said to me last year, "We're the FedEx of the Web." Probably an
understatement, in my view.
Yet, at a current market cap of $1.5 billion, a lot of expectation is built
into BWEB shares. Branding remains an area the company must raise among the
Web user base.
Here are some of the keys to understanding BackWeb:
Its software allows companies to distribute data efficiently.
Data can be software, content, videos, purchasing requests, anything
"bitable."
Rules-based delivery allows data to be smart and find alternative
appropriate recipient if one isn't available. For example, a travel agent
may get a request for an airline ticket, which gets re-routed if that agent
is busy or unavailable. Or a parts order gets sent to a specific purchasing
group and if that group is not available or unable to supply the order,
then it is re-sent to the next group.
Using its "polite agent" technology, BackWeb delivers data (or tries to)
when bandwidth isn't being used. For example, most Internet users use the
Web or email in bursts, and then the bandwidth is unused for long periods
in between. Polite agent, however, sends data using BackWeb's delivery
technology, making bandwidth use more manageable, a key cost benefit for
corporations.
BackWeb's software can trigger events in delivery to run an alert,
launching audio and then video in order to maximize the end-user experience.
I believe that corporate use of this technology is underutilized, despite
BackWeb's impressive client list that includes Pacific Bell, Cisco, HP and
more.
In business-to-business alone, BackWeb could become a larger player as the
underlying technology becomes more exploited for what it can do. That's
something BackWeb must work on - getting its message out.
On the consumer side there's not much you see today, but with bandwidth to
the home needing some managed solutions and ways to overcome slow modems,
BackWeb's ability to deliver content and commerce in the background could
have some potential.
In media alone the TV networks have no idea what BackWeb can offer, from TV
guides and show previews to rich media ads. And the recording companies
probably need to see what BackWeb can do with songs and artist promotions.
Movie trailers (the promos for movies) are also an easy service.
Anyway, BWEB may be starting to get the recognition that I predicted ever
since it went public. But I believe it has much more potential, more than I
have seen anyone give it credit for yet.
Maybe BackWeb will be moving front and center soon.
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Steve Harmon was named to "Best of Wall Street" by CBS MarketWatch. Readers
of this analysis include Bill Gates, Jerry Yang, Esther Dyson, John Doerr,
Dave Wetherell, Ann Winblad and thousands of investors worldwide.
e-harmon.com is hiring! Do you have the right stuff to be CTO of a
fast-paced, future-oriented Internet investing firm? Must be fluent in Web
programming, database, popular protocols/platforms AND have the desire to
have fun while applying business/investing sense to this unique position.
Right salary and comp package for right person! To learn more, please send
email to cto@e-harmon.com (principals only).
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********** Zero Gravity - Internet meets venture capital guide
By Steve Harmon, from Bloomberg Press (Nov. 1999)
get it at Amazon.com, follow this link:
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