Tom Taulli on NETO--part deux:
Tom Taulli, senior editor of ISR wrote his first article (tres positive) on NETO a few months ago when the stock was at $6.00. I bought the stock the same day based on what I read. Here is his recent updated thoughts: the stock is still a BUY.
- internet.com's -
I N T E R N E T S T O C K R E P O R T
By Tom Taulli
Senior Analyst (mailto:ttaulli@internet.com)
isdex.com
"Where Wall Street Meets The Web"
NetObjects: Room for More
Back in October 1999, I wrote about an IPO that flopped: NetObjects.
However, the company has since proven its critics wrong.
Back in October, I talked to the chief executive officer of NetObjects
(NETO) , Samir Arora. The company had an IPO that broke its IPO price
and was selling for a lowly $6 a share. Many thought it was a software
has-been. But when talking to Samir, I thought there was a great
opportunity and wrote a column about it "NetObjects: Quietly Building
Its Small Business Portal (10/27/1999)." Yesterday, the stock closed at
$32-9/16. The high is $41-7/8.
The company continues to become an integral part of the Web. NetObjects
has enabled over 2.5 million Web sites globally, which is about a 20
percent market share. With such a huge customer base, the company can
continue to rapidly grow its business, as new products are offered into
its expanding channels.
In fact, the company has released the new version of its flagship
product, NetObjects Fusion, which is version 5. The software is browser
based and of course, integrates many Web services to help get companies
online (such as www.register.com).
Another important release is Collage, which is a content management
system for the enterprise. The system has extensive collaboration tools
(linking everyone in the enterprise) and allows for a real-time view of
the content management cycle. Users can manage virtually any type of
content: images, media, documents, dynamic data, and even applications.
Collage is built using reusable components, enabling the technology to
be easily integrated in a corporate information system.
But perhaps the most exciting part of the company is its new concept of
the embedded ASP (application service provider). Increasingly the
traditional software model -- which requires a licensing fee -- is
giving way to the ASP model. Think of this as renting software services.
What's more, the services reside on a central server, which can be more
efficiently maintained.
NetObjects has gone a step further by allowing companies to embed the
ASP services. This is accomplished through the company's new site called
GoBizGo.com. Here's how it works: Let's say XYZ Corp. wants to
established an e-commerce presence, but does not know how. What's more,
the company does not want to deal with the constant headaches of
managing the complex details of an e-commerce site. By going to
GoBizGo.com, XYZ can easily construct an e-commerce presence. More
importantly, the site looks like ZYZ Corp. built it.
In fact, the GoBizGo.com site allows other sites to resell these
embedded ASP services. For example, OfficeMax has access to many
business owners that want to get online. With GoBizGo.com, the company
can provide these customers with seamless ASP services. NetObjects has
more than 25 such partners, which include ADP, Sir Speedy and Deluxe
Paper Payment Systems.
For NetObjects, the embedded ASP model is huge. Instead of relying on
one-time licensing fees, the company will now get recurring revenues.
The small business market is relatively untapped. While there are 18
million small businesses, no more than 15 percent have any Web presence.
The big problem has been lack of an integrated solution. Well,
NetObjects has one. Interestingly enough, it first provided such a
solution in Germany. Now NetObjects has enabled 60 percent of the sites
in that country.
In my October article, I concluded, "At its current price, the stock
looks very attractive." To me, the statement still is true. |
