Hi Buckey;
Here is an eccerpt from the recent buy recommendation by Yale Hirsch on InfoCast:
InfoCast Corp. is a fledgling application service provider (ASP).
This is one of the hottest industry groups in the market, and InfoCast is a new ground floor opportunity that is still largely undiscovered.
In computer lingo, applications are all the programs that do the work people want done (as opposed to just running the computer). Microsoft Windows is an operating system.
Microsoft Word is an application. A company?s bookkeeping and financial control system is a more complex application, or sometimes a series of linked applications.
Large companies spend many millions of dollars on applications software?but that?s just the start of the money drain. The software must be maintained and updated; technicians must be available to fix the inevitable glitches. And new software, if the project is large it takes a long time to install and get working right. All these problems are multiplied for e-businesses, where the networks are complex, everything has to work right, and time is always short.
Along came the ASP idea. Why buy, install, and worry about
systems and software 24 hours a day? Why not access applications on line when and as needed? The idea is obvious, and obviously right for many users. But it required the development of cheap, secure, and high-bandwidth communications to make it happen.
Now that those high-speed fiber connections are available, Forrester Research estimates that ASPs will have a $6.4 billion market by sometime next year. That?s up from almost nothing a couple of years ago. As you might expect, some major software companies are getting into the ASP business, with Oracle the most notable. A few telecom firms like Qwest also see it as a natural. But Wall Street is betting that specialists in this rather complex business (involving hardware, software, networks, communications and intense customer service) will fare best.
Our earlier recommendation USinternetworking (USIX) is a pioneer in this field, and it gave us a five-for-one gain in five months. That seems to be the market standard. New issues Digex (DIGX) and Interliant (INIT) have also produced five-for-one gains recently. These are Web hosting companies whose services also include applications.
Few Pure Plays
There are still not a lot of stocks to play in this field. That?s one reason for the big gains in these stocks?and for accumulating InfoCast, which has not yet been exploited. InfoCast has still another advantage. It will be addressing an area in which there is little or no competition: ?virtual? call centers.
Most companies that deal extensively with the public already have call centers?essentially a group of employees trained to provide information, take orders, handle complaints or deal with problems via telephone. The birth of e-commerce is vastly expanding the need for call centers. Online merchants have found that they can?t strictly
take orders via a computer, though that would be nice. When any problem comes up or more information is needed, customers still want to speak with a human.
Setting up, staffing and maintaining call centers is harder than it might seem. Just for starters, the employee turnover in such operations is often as much as 50%. InfoCast has a large part of the answer. With its virtual call centers, InfoCast provides all the infrastructure and communications requirements. The client must furnish the employees, but they don?t all have to be at the same place or even in an office. They can work at home, which is convenient for a great many workers and also for the employer. A company can have standby employees for peak periods (available at very short notice) and pay them only for the time they are on the phone.
With virtual call centers, InfoCast is addressing a market believed to be worth $12 billion a year, and growing fast. There are closely related growth markets that the company is also pursuing. The same communications capacity can be used to service other teleworking employees, at home or on the road. And the company is getting into the mushrooming distance learning market. The first courses will be for training call center and information technology employees.
InfoCast is a Canadian company, but it is fully reporting in the U.S. (in U.S. dollars) and it?s listed on the Bulletin Board. So far the company has done only limited business, mostly in Canada. But revenues are growing fast?$1.5 million is expected for the current quarter, up from almost nothing. At present clients are served from two hubs in Canada.
The company is targeting all of North America; other hubs will be established as the business grows. InfoCast uses
AT&T Canada?s secure and efficient virtual private networks, with global connectivity through the AT&T system.
Big Deals Possible
Negotiations are going on to make AT&T a partner rather than just a carrier. If the talks are successful, AT&T would offer InfoCast?s services, perhaps under its own brand. The company is also negotiating with major software firms to broaden its offerings. One contemplated deal would bundle InfoCast?s virtual call center capacity with custom e-commerce software, allowing the company to provide complete e-business solutions.
The company plans a small private-placement financing soon and a brokered public stock offering later in the year. The second offering, with one or more substantial underwriters, would provide the long-term .... |
