08:50am EST 18-Feb-99 Dain Rauscher Wessels (Sigmond, Steve 612-313-1223) NSOL
DRW Technology Conference Presentation Highlights: NSOL
Dain Rauscher Wessels
A division of Dain Rauscher Incorporated
DRW TECHNOLOGY CONFERENCE
PRESENTATION HIGHLIGHTS
February 18, 1999
INTERNET INFRASTRUCTURE
Stephen H. Sigmond
ssigmond@dainrauscher.com
(612) 313-1223
Cameron P. Steele
csteele@dainrauscher.com
(612) 313-1224
Network Solutions, Inc. (Nasdaq: NSOL, $140.00)
Buy-Aggressive; Price Target: $240
* Network Solutions presents at the Dain Rauscher Wessels Technology Conference.
Bob Korzeniewski, CFO and COO of Network Solutions, presented at the Dain
Rauscher Wessels Technology Conference on Wednesday, February 17. Highlights of
the presentation included a review of current business trends, the domain name
market opportunity, and complementary service offerings. Management indicated
that current business conditions continue to be strong with continued high
demand for both domain name registration and complementary services.
* Demand for Network Solutions' domain name registration and service business
continues to be strong. Domain name registration continues to track to the
growth in the Internet, with the .com top-level domain (TLD) continuing to be
the most popular registration domain. The company's new Dot Com Mail service
offering has been well received by small business customers. In a service
partnership with Critical Path, Network Solutions is offering personalized,
hosted e-mail for $119, along with a $4.95 per month hosting fee. Initially,
this service offering has had a "self-marketing" appeal to many customers who
see friends, businesses, or customers using personalized e-mail, drawing
attention to the service.
* Network Solutions sees domain name market potential to be 100 million-plus
registered names. Network Solutions segments its market opportunity into five
separate categories: U.S. businesses, one-time events, international businesses,
products/services, and personal names. The company estimates the market
opportunity for each of these segments could likely be 10 million names for U.S.
businesses (i.e., ibm.com), 10 million names for single events (i.e.,
SuperBowl.com), 30 million names for international businesses (i.e., bmw.com),
40 million names for products/services (i.e., Cheerios.com) and 50 million
personal names (i.e., BillClinton.com). With currently four million domain names
under registration, we believe Network Solutions has an enormous market
opportunity in domain name registration services.
* Stock Opinion: We believe that Network Solutions has one of the few
predictable, profitable, and proven business models among Internet companies.
Despite the high volatility of the stock, we continue to believe that the
company is well positioned to maintain its dominant position as one of the most
important infrastructure services companies on the Internet. Our 12-month price
target, reflecting a 35x multiple on projected year 2003 cash flow and a
moderately conservative discount rate of 20%, is $240. We are maintaining our
Buy-Aggressive rating and recommend purchase on share price weakness.
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