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Technology Stocks : AUTOHOME, Inc

ATHM 23.75

+0.1%

3:59 PM EST

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To: gpowell who wrote (19146)	1/22/2000 4:02:00 PM
From: E. Davies	Read Replies (2) of 29970

Just found the time to listen to the ATHM conference call. It was more uplifting than I expected. corporate-ir.net Bell had a little fire in him. I liked his statment that "We are going to put the fight back in Excite". Sadly the a fair amount of the discussion of the business boiled down to having to defend against the issues that the market has held over ATHM's stock price. Did you know for example that 20% of ATHM homes are outside North America and have 7 year exclusivity agreements? They also had to point out several times that they have 3x the footprint of AOL/TWX and 2x the subscribers as RoadRunner. Many times they referred to the issue of the exclusivity agreements expiring. They said they felt that renewal of many of them is assured, and that only 2-3 of the 23 MSO's might be able to find the technical skill to do what ATHM does. It is a top priority of ATHM (and what TJ will be spending a lot of his time on) to resolve now what the relationships with the MSO's are going to be post-exclusivity. They know the market needs to see this before the stock will succeed. A couple of additions to your nice summary: The estimated revenue growth for 2000 is 75%-85% above 1999. The issue with subscriber growth was not as bad as I thought. Speaking to the analysts what was said was: "Your subscriber estimates are currently clustered around 2.5 to 2.8 million which is clearly very doable". It was not an estimate from ATHM itself. This also means these estimates do not include DSL/Wireless & TV subscribers. If ATHM is aggressive in rolling out alternate platforms I think that my personal 3-3.5 million estimate is still quite acheivable. They claim they intend to be agressive and are already in negotiations with DSL providers. I hope they hit AOL territory first and hardest. Then they should start petitioning for "open access" to TWX customers. Lets see how much fire @home really has! You said: Unfortunately, the volume roll out of retail modems seems to have been delayed further out into late 2000. That really was more a matter of interpretation and expectations than stated fact. "Buy your own" is available right now in some places and will steadily be growing through the year. As you noted they expect ~30% of new modems to be retail by next Christmas. What matters more is any progress being made in speeding up installs, all the way to user install if possible. Sadly I found that Bell quickly glossed over that issue. I guess its not going that great. Install time is now ~ 1 1/2 hour. Excite Broadband won't be released until late March (it was mid Feb. before- Hmmm..) Test marketing has shown "an order of magnitude" increase in time spent on the Excite pages with the new site. I feel a lot of Excite's future depends on how Excite Broadband grabs the public. I found it humorous that the very first question from an analyst was about AOL. Sigh. The next several were about rolling out into DSL. Anything but the main core of the business... The meeting was followed the last few days by a whole series of earnings estimate reductions. I don't know where the estimates came from anyway nor why they were reduced. I don't think they were due to any change in the view of the long term business however. I was thinking of reducing my position in ATHM, but have decided not to. They still have a great future ahead no matter what the market thinks. Eric

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