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Posters, Carol is one, have indicated concern for AXC's newly minted valuation should the Internut group in general take a header.
In fact, there is quite a range of Internet business companies. What seems to have caught public fancy the most are the AMZN, BCST, and YHOO "retail" types. What characterizes each of these high flyers is a relatively flimsy business model with a service mark-up and relatively low barriers to entry. Should any one of these ever make a economic profit, their markets will become instant targets for other wannabe's and their profits will be competed away by a rush of competitors. Barron's journalists and other commentators are justified in taking an easy pot-shot here. The commentators are "bound to be right" - eventually.
Ampex, however, is in the equipment backbone business (like a Cisco and a Lucent), and is now newly established (and still evolving) in the narrowcast broadcasting service business. Each of these venues have high barriers to entry (technological, legal and goodwill based). Should economic profits arise, these profits will not only be hard to identify and target, but they will be protected by patent law, focused marketing strategies and technologically specialized expertise.
These advantages will not go unnoticed by the investment community. IMO, many larger players are awaiting full details regarding the complete rollout of AXC's Internet plans and are awaiting a full statement of Ed Bramson's Internet vision. There is still much more to come.
Ed Perry
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