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Technology Stocks : AUTOHOME, Inc

ATHM 23.24

+0.6%

Jan 15 3:59 PM EST

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To: Ted Schnur who wrote (2400)	7/8/1998 12:43:00 PM
From: ahhaha	Read Replies (2) of 29970

I assume you are trying to indirectly answer technopeasant's question. I am trying to get technopeasant's delivery parameters in order to demonstrate that you can't do good content without good delivery. ATHM is a delivery service, so of course their business model is built on delivery. They are in the early stages of building the added value aspect of content through their own auspices and through deals with various content providers. This aspect of the business is nascent and primitive. Your illustration of HP and IBM is not quite similar here. Cogeco runs at 500 kbps. They delimit the volume of download at 1.5 G/mo. Only Cogeco will divulge their rates to those who live in the few communities pulled to HFC. Their content is similar to the ATHM model, but every MSO will have a different mix of services available outside of the default ATHM presentation. The variety of mixes won't be seen for another year or at least until tv/telephony/internet convergence is substantially in place. The issue becomes what is the cost of Cogeco and what is the upstream rate. If these are comparable to ATHM and if the speed advantage of the captured content isn't used and you don't need the high speed accessible sites, then there doesn't seem much reason to go with ATHM at this time. However, in the future unless Cogeco improves in speed, content, and subscription flexibility, they will lose market share to ATHM in Canada. It is hard to see why an MSO would create their own cable content model now. Cheaper to provide ATHM and then later, once you've learned what is involved in an arena that is still being defined, to roll your own. My impression of Cogeco is that they are a shoestring operation, symbolic of what socialism has done to Canadian companies. You have to decide whether you prefer the Russian Vesta or a Lexus.

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