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Technology Stocks : AUTOHOME, Inc

ATHM 24.34

-3.4%

Nov 7 9:30 AM EST

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To: E. Davies who wrote (19417)	2/5/2000 1:41:00 PM
From: ahhaha	Read Replies (4) of 29970

A year ago we had estimated 30% and that has become the accepted figure. The only reason Goldman is stretching it to 70% is that the server farms have risen dramatically in size. Why do you think this is so significant even if it's true? Stress isn't due to overloaded backbone unless the 'bone is crowded due to traffic reroute because of other system's failure. Such failures occur and the Net slows to a crawl, but they are extraordinary occurrences. Goldman didn't say a word about the real problem of latency. The ATHM network delivers, but that doesn't mean that when a request for data from the cloud is received that the cloud's response will be instantaneous. The ATHM network must wait for the cloud to resolve its latency. The result is that @Home drops down to 56kbps speeds as packets are leaked little by little out of a crowded cloud. Yesterday I was pulling 589 bps. What good is local caching when 70% of your new packet requests (new or refresh data) go to the cloud? Admittedly when the network is fully subscribed this aspect will be of far greater significance. Fool claims that current price weakness is due in large part to perceptions of the AOL-TWX threat. This is an error spawned by perceiving perceptions rather than perceiving reality. It assumes that investors are as dumb as Fool projects them to be. We have discussed that the merger diminishes AOL's current threat to ATHM, but they were never a threat. Just where have they ever competed? This whole issue is ridiculous and irrelevant now, but contrary to Fool claims, AOL will be a major threat due to the merger. You'd have to be a fool to forget about RR regardless of how rickety it is. The stock is in a base. It can rise to $57 without disturbing the base. Without some change the company won't get out of the base because it is extremely hard to find profit within the existing business model. There are always new mouths that eat the potential the company may have. When they do something that adds to top line, another eater grabs the gain. They have to find a way to stop bleeding and start profiting. The problem with ATHM is not in their stars but in their selves.

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