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Technology Stocks : Internet Guru Discussion
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To: Millionairess who wrote (639)3/17/1999 11:14:00 AM
From: Wizard   of 4337
 
re Inktomi....

>>are the portals going to be the losers here?

the portals are Inktomi's customers. that doesn't make sense.

Inktomi is trying to say its the power behind the portal a little bit similar to Intel and 'Intel Inside' PC's.

The problem is that INKT doesn't have the leverage because the advertising model of the internet is not comparable to PC's. Intel commands a good % of the overall $ spend on a PC but you won't see such a company in mediums like TV. Cisco (and to a lesser extent Sun Microsystems) are the power behind the internet.

Inktomi is all concept stuff and though they are sitting in a great spot, leveraging that spot into huge revenues will be tough to pull off. They think they are their own platform but this sounds like venture type of risk to it.

Think about this. AOL's data center is loaded with INKT caching software sitting on their servers and all AOL traffic goes through this layer (something like a billion hits per day and growing very fast). However, despite the fact that AOL bought enough software to handle this traffic load, INKT has reported trivial amounts of revenue.

On the search side, the economics of growth are bad for INKT. As different web portals search queries grow, INKT gets less and less.
Investor perception is that INKT's revenues will scale with overall internet traffic growth. This is total crap. INKT will grow nicely because as it is adding services like comparative shopping but perception and reality are far apart on this one.
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