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Strategies & Market Trends : Gorilla and King Portfolio Candidates

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To: Seeker of Truth who wrote (31581)	9/14/2000 10:48:16 AM
From: Bruce Brown	Read Replies (1) of 54805

Please read the gorilla game book. Slow down, Malcolm. Shamsaee has read the book, I can assure you. I believe the way the sentence should have read was something to the extent of "Is CommerceOne in a gorilla game?" rather than: CMRC a Gorilla? I understand an investors risk aversion strategy might have led you to say: The crowd that hangs around this thread are serious about at least octupling their holdings in a decade so they are allergic to money losing companies. If you've studied the balance sheets of the competitors in the 'game', you will see very positive cash flow and solvent business models from at least the one's I have chosen as my investments to date (i2, Ariba and Oracle). I'm watching CommerceOne like a hawk waiting to see if those cash flow's can improve over time based on their unique business model which one does need to study when comparing the cash flows and revenues at this stage in the game. There is an amazing amount of deferred revenue as well for all the companies, but that's a whole other issue and discussion. The Fool has been doing some good work in the Rule Breaker, CommerceOne, Ariba and i2 boards over the past few months. boards.fool.com You can look at it from a vantage point of Ariba vs. CommerceOne or you can look at the game in terms of partnership/alliances. The alignment of the 'game' using that method is as follows in terms of partnerships and what to watch: •i2/Ariba/IBM •Oracle •CommerceOne/SAP CommerceOne does have an interesting architecture and they derive their revenues from three sources: 1. Exchanges 2. Regional e-marketplaces 3. Net market maker This interesting architecture offers a 'solution' rather than 'software'. They provide an 'e-market' solution beyond the 'e-procurement' solution. Revenue growth over last quarter and the year ago period was pretty impressive for both Ariba and CommerceOne - as was the number of deals inked. Ariba - sequential quarterly growth was 101% CMRC - sequential quarterly growth was 79% Ariba - y/y growth was 578% CMRC - y/y growth was 1,392% Ariba - # of new deals inked were 100+ CMRC = # of new deals inked were 85 If the trend continues, I would hope that the underlying fundamental numbers at CommerceOne begin to reflect that in a positive way based on their business model which is different than the other competitors - yet in the end will iron itself out for this emerging industry. If one doesn't understand the business models and the game in this emerging industry, then your comment is justified. One should step back and not participate. Otherwise, as I have stated before on the B2B subject, the basket approach does seem to warrant the attention as the best strategy. In the last 60 weeks: i2 +975% CommerceOne +628% Ariba +459% Oracle +352% Who knows what the decade return will be for these companies participating in this emerging space. It could be much less than any of the returns they have provided in the past 60 weeks. That's always a possibility..... BB

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