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Technology Stocks : AUTOHOME, Inc
ATHM 23.60+0.5%10:30 AM EST
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To: Frank A. Coluccio who wrote (3521)12/24/1998 3:12:00 AM
From: ahhaha  Read Replies (1) of 29970
 
As the area covered rises the demands on the core rise at the square of the total area. It is assumed that the same old technology is used and that the technology can scale. The one-time cost to build and continual cost to support the edge is proportional to the area covered. The Marketecture does achieve efficiencies once the first economy of scale is reached. The scale threshold sits at 70% penetration. When the core and edge stabilize after threshold, the return on investment is proportional to the cube of the area served. Thus, the extra capital that should be applied to achieve threshold is proportional to the expected threshold area to the three halves power. At 10, (10)^3/2 = 32. At 100, (100)^3/2 = 1000. It's a lotta dough and TCI ain't got it. They spent it on Big Bird and other required watchings.
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