Do I have to answer? Well, I think it depends on...
(1) What's really going on with those search engine contracts: is Inktomi really getting 25-50% of the ad revenue from page views to information searched by their engine?
And if they are, how long can they maintain that kind of percentage? All technology is replacable by upgrades and new products, so can Inktomi stay ahead of the upgrade/new product power curve if other search engine suppliers add "Inktomi" type features and decide to price compete?
Inktomi customers that use the engine also increase their cost base by agreeing to pay Inktomi (what some would say are high fees).
(2) What's going on in the caching business? It's interesting that the prospectus was tilted towards caching growth (at least that's how I read it), but based on search contracts signed during the registration period, investors seemed to focus more on the business model of "share portal ad revenue through using Inktomi's search engine".
-------------------------------------------------
Inktomi is a very young company, basically 2-year old company, which has done some great things.
And 3 months is 3/24 = 1/8 of their entire history, so 3 months is a long time in their particular space.
The standard answer is, of course, "it depends on execution of the plan". Yes, but with 21 million shares a $40 price converts to a market cap of $840 million. Which represents lots of future expectations and not much room for error.
Best,
Francis
|
