I held this one briefly at the time of the IPO and then reluctantly sold because it was clear that the price action was turning against CTRA. With the price at these levels, and the confirmation of yet another quarter of excellent results, I'm preparing to re-accumulate this stock for a longer-term investment. I think Web-based collaboration is one of the killer apps of the broadband age; and with the bandwidth buildout reaching its hyper-growth stage, I'm expecting the business world to be ready to adopt online collaboration in a big way. (There's also great potential in the consumer domain, of course, but CTRA is rightly focused on business and educational markets for its products.)
One problem I have with CTRA is its decision to position and market itself so heavily as an eLearning company. This is obviously a tremendous use of CTRA's technology, but I think it draws attention away from the fact that this integrated data-voice delivery platform could revolutionize business communications -- within the enterprise, with business partners, with customers, etc. The promise goes far beyond eLearning (as important as that particular application truly is), potentially encompassing any situation where interpersonal interaction is required. Do you want to conduct periodic meetings with sales managers who are scattered all over the globe? Well, do you fly them to HQ for the meeting, or do you meet and exchange data via the Web? Do you need to bounce around ideas and work up specs with an Asian sub-component supplier in your supply chain? Well, do you fork out the money for travel between North America and Asia, or do you meet in an online environment where you can simultaneously talk and use shared data and applications?
For businesses trying to manage expenses, there's an extremely attractive cost-proposition here: I think CTRA should move aggressively to position itself beyond eLearning, and within this broader context of business communications. Frankly, if I were ITWO, ORCL, BVSN, ARBA, or another company in the B2B/supply-chain space, I would make a serious effort to buy CTRA: digital collaboration is an obvious complement to their products.
The bottom line, so far as I'm concerned: CTRA appears to be executing impressively, I'm a huge believer in the potential for digital collaboration, and I think the broadband rollout will ultimately serve as a catalyst to spark companies like CTRA that are developing applications for a high-bandwidth world. I don't necessarily expect rapid short-term price appreciation from here, but simply see a great deal of undiscovered value that should eventually come to light. |
