SMTF
Irish Times Business section Nov. 26 1999
Mc Cabe,SMTF, says "Contracts with Manpower and Microsoft were endorsements of SMTF,s move to internet training.The market is beginning to understand our strategy"
SMTF says it,s e-learning is a faster and more interactive way of learning .It,s development will cost 45 m$ -30m$ on infrastructure and 15m$ on marketing and the establishment of a brand name.Currently the site is getting 10000 hits per day.
Because SMTF will now provide access to an internet environment rather than sell software licenses revenue under the new agreements will be recognized over the term of the agreements rather than annually in advance .Revenue will thus be substantially reduced in 2000 and will lead to a loss.Mc Cabe says profits should start to flow through in the last qtr of 2000,with real profits to flow through thereafter.
Sunday Tribune Nov. 28 1999
Because of the new internet strategy SMTF expects to
-sell more product to it,s 2000 corporate customers
-fill the current gap in the market for e-learning services pipping internet startups to the post and defending SMTF,s existing markets from being "amazoned"
-double the current avg. contract size from 100000$ to 200,000$
-target consum,ers for the first time and to gain 1000,000 subscribers by end 2000.The company will spend 15m$ initally on marketing and advertising and much more as the strategy develops
-become a strongly profitable "dot com" internet company by end 2000
Analysts are enthusiastic about the strategy.
IMO SMTF's move to an internet strategy is sound and interesting bearing in mind
-to achieve "dot com" internet valuations may require SMTF to sell advertising space.IMO advertising and training may not mix well
-the total 45m$ spend is modest given the goals SMTF has set
for itself
-there is nothing to stop new entrants at any time coming in to this market
-Bill Mc Cabe is not a stock market darling
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