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Technology Stocks : Network Associates (NET)

NET 163.43

-4.1%

1:02 PM EST

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To: ken whited who wrote (2369)	4/10/1998 2:46:00 AM
From: Cyclops	Read Replies (1) of 6021

Ken. I would not be worried about NETA. It is on its way to be a 800 pound Gorilla in the Internet Security field relatively speaking. The PC/Internet security industry is highly fragmented and populated by many small outfits. Quality of these outfits varies a great deal such as the top rated Sniffer by former NETG in its category. Stock Analysts have been saying for the last year or two that this industry will consolidate very much as in the fashion of the banking industry in this country. In order for the acquisition of NETG to be successful, the logic behind the acquisition is commoditzation of security products. At this point, Sniffer is a expensive product available only to large sized companies. NETA's goal is to commoditize Sniffer and make it affordable to companies outside of Fortune 500. Large corporations will be able to purchase more units at a better price. The crown jewel is NETA's internet security packages. Would you rather purchase five competitive products and undergo a massive headache to make sure these products in fact do work together. What if one of these small competitor went out of business then you have to replace or forgo it. Unfortunately, there is a price when it comes to commodity. It means to cut the price of products low enough to command a larger market share. It means you have to sacrifice bloated department with overlapping functions. Merged companies quite often have overlapping functions done by two or three set of employees. Larson is a genius when it comes to saving the best products and cutting out the unecessary. By offering many products in one package at a low cost and many functional abilities why would you refuse the package. Intel made the mistake by keeping its product expensive and this allowed competitors such as AMD with K-6 to take away market share. Even Microsoft warned Intel a few years ago but Intel ignored their advice. By commoditizing security products, NETA is in fact the first to enter the field by offering the security package. This is where Larson is making the big push. I would much rather buy my products from NETA knowing that they will the biggest outfit five years down the road. At this point, NETA is 600 pound baby Gorilla on its way to a 800 pound Gorilla. There is no other outfit in size or comparison close to NETA. None whatever! You have gotten a very good deal. At a lower price, you may not get a "birth to cradle" service from NETA but they will make sure that your products will work. I would rest easily tonight in bed. Regards, Cyclops

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