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Technology Stocks : Commerce One Inc - (CMRC)
CMRC 3.395-9.2%Jan 20 3:59 PM EST

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To: Hands Off who wrote (1141)4/16/2000 12:27:00 PM
From: Pareto  Read Replies (2) of 1938
 
Let's compare it to the real world

The exchanges Commerce One is building, does it resemble:

- a port
- a shopping mall
- or a road system?

A port is the physical example of a crosspoint of large amount of goods. Size is the measurement of successful ports. Some handle millions of containers per year, so they are able to build highly standardized loading and unloading systems. The concentration allows expertise and specialization. Costs per unit go down. But prices charged remain at a competitive level, there are always other ports nearby. The profit is only based on the efficiencies. Within the ports some actors understand their power so port authorities charge high taxes and trade unions negotiate high wages.

A shopping mall reflects a large amount of buyers and sellers together. Malls are capable to charge a high rent and sometimes a high commission on sales. If charges are too high, prices will become to high and people will start shopping at the nearby mall.

A road system is a sort of standard operating system for traffic flows. Their are always other roads that lead to your destination. If a road is fast and shorter than others you are will to pay a fee for using it.

I think that the electronic exchanges are not different from real world examples. To the extent that they are efficient, fast and attractive for many users, they will be able to charge a reasonable fee. But it is no license to print money. I never heard of a port, mall or road operator in the Fortune top 100.

Regards,
Pareto
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