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Microcap & Penny Stocks : International Nursing Services Inc, old (NURS) new (MDIX)
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To: Mike Moran who wrote (2445)1/19/1999 11:19:00 PM
From: Robert E. Winston  Read Replies (1) of 2911
 
<<The Cymedix internet division of MDIX is incapable of implementing a $24 million contract with Wellpoint or anybody else, even if its core funding rate were raised 150%.>>

Mike, I wonder if you could explain why you think this is so.

The reason software and Internet companies are so extremely profitable is that their incremental costs are very small.

If I get Wellpoint to test my new application, Bob's Better Word Processor, on 100 computers and they like it, what are my costs to roll it out to 100,000 stations on their net?

Since they're networked, I don't even have to stamp out CDs and print up boxes.

From the Internet prospective you have the same kind of cost efficiency. Once the system is in place how much more does it cost Silicon Investor, for example, to serve another 100k users?

That's why these companies get such high multiples.

Of course there are costs, especially with a new product. Some people will have to go into the field and hold hands, fix the inevitable bugs, and in general clean up the mess after the Attack Of The Idiot End Users. But these costs should be rather small compared to the income the contract would produce.

Or do you see it differently?
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