Gorilla Game Investing in the eWorld Message Board

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Strategies & Market Trends : Gorilla Game Investing in the eWorld

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To: Teflon who wrote ()	12/28/1999 12:50:00 PM
From: Apollo	of 1817

Perspective on Exodus......posted on G & K by last night... I posted some questions on EXDS on the MF board, and received the reply below. Stan ________________________________ boards.fool.com 1. Why are the analysts underestimating revenues? I cannot find that EXDS is expecting declining growth rates. I think this is simple enough if you look at it from the view point of the Wise. Nothing wrong with underestimating and then raising your targets later. The company just bested expectations. But overestimate and have to curb your estimates and you personally as an analyst look like a fool. 2. Would you agree that the barriers to entry in the web hosting industry are low? ie, anyone can build Internet Data Centers, etc? I think anyone could build one, but who else out there is building them as fast or can manage them like Exodus does? Intel announced over six months ago that they were going to open IDCs. So where the hell is even the first one? Exodus has opened two or three in the ensuing months. Same story with their other competitors. 3. Would you agree that the switching costs from EXDS to another competitor are low; if I am in error please tell me why? Most of what I have read says that switching costs are very high and that Exodus has had an excellent record of retaining customers once they have them. Switching would probably have to be pretty expensive, because you would have to do one of two things - either go completely off-line while the switch was taking place and the equipment and servers were being moved to the new IDC and restored and completely tested or build a redundant system at the new facility. Then what do you do with the old equipment? Expensive paperweights? 4. Will EXDS's market share decline with all the competition? If not, why not? They have no intellectual property or special services. As I see them, they are an early mover, and efficient; similar to Dell? Comments from the gallery? Or is EXDS so superior to competition as pure-play web hoster, that market share will grow? Right now I don't see market share as normally construed being the real issue. This market is growing in such leaps and bounds that there is more than enough business for all the competition involved and then some. In two or three years time as this industry starts to mature that might be a different story. Still, being there "furstest with the mostest" holds great weight. Exodus lands 80% of the business it goes after and I think that that is no mistake or dumb luck. They are doing something right and IT managers trust them, people who for the most part are notoriously suspicious of vendors, having been bent over by more than their fair share of wannabees and promise-makers. Exodus has a reputation of keeping promises and is the company the others wannabee.

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