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To: bobby beara who wrote (23811)	6/23/1999 8:09:00 PM
From: puborectalis	Respond to of 41369

DID YOU FORGET THIS ALLIANCE?..... Posted at 8:33 p.m. PDT Sunday, April 11, 1999 Q&A on Sun-AOL 'strategic partnership' New alliance is virtually an experiment Mark Tolliver, a Sun Microsystems Inc. executive, has been named to head one the largest and more unusual software organizations in Silicon Valley. The Sun-America Online Inc. ''strategic partnership,'' is a 2,000-employee virtual company staffed equally by Sun and former Netscape Communications Corp. employees and reporting to an advisory board made up of Sun and AOL executives. Its mission is to create software infrastructure and products for e-commerce. Tolliver discussed the organization's structure and goals with Mercury News Staff Writer Miguel Helft. Here is an edited transcript of their conversation. Q You are taking over a software organization that is made up of employees from two companies and reports to different parents. How is it going to work? A The formal answer is that there will be people that are on our payroll and have badges that say AOL-Netscape on them and people who have badges that say Sun. In that sense, it is pretty straightforward. We will do a couple of things way beyond that. One of them is that we will be careful to level out and equalize the compensation schemes around the organization. But more important, we will really structure ourselves, act and communicate like a software company. That means that we will have projects, delivery dates, sales force, professional services, management staff and we will do everything that we need to do to help people understand that we are commercial entity. We will have AOL and Sun people working side by side on development projects. In the sales organization we will have sales offices composed of both AOL and Sun employees. (It will be the) same in the professional services, marketing and management teams. Q Who will pay for the overall organization, its staff and research and development efforts? A The overall notion of the alliance is that both companies will be paying more or less equally for the operation. But the real answer is that we are going to fund this operation from the revenues from the products that we build. Q How will those revenues be accounted for on the balance sheets of the two companies? A The high-level agreement is that revenues will be split more or less equally between both companies. But I'd like to stay out of this (issue). Q Are you going to relocate people under one roof? A The good news is that we are all located for the most part close together, within five miles of each other. Most companies are used to a fair amount of geographic (diversity). What we will do as we go forward is look for opportunities to bring teams together, either on Sun sites or Netscape sites. But we are not immediately starting a large-scale program to relocate people to a new site. Q Running any kind of organization is difficult. But here you have two separate workforces being merged somewhat, but not completely. Similar partnerships in the tech world in the past haven't worked well. What makes you think you can pull it off? A There are a couple of reasons. Number one is we start with a terrific portfolio of products that are shipping to customers and are generating hundreds of millions of dollars in revenue already. We have no intent on running a science fair. The other element is that both Sun and AOL have decided that we have to give this operation all the things it needs to succeed. So we have development organization that is 100 percent focused on this. A sales operation, a professional services operation, a marketing team and so on, so that we can be responsive, so we can make quick decisions. Third, I think this is such an exciting area of our industry right now. This entire Net economy represents such a huge opportunity. Q A couple of weeks ago you said you would continue to support both companies' products and merge overlapping products over time. But if I am a new customer who needs, for example, an ''application server'' to build my e-commerce site today, which one will you recommend: Sun's or Netscape's? A This is one (question) where I really need to speak to my team about it (first). Q When there are disagreements between Sun and AOL in the future, who will have the power to make a decision as to which way things are done? A That's what this advisory board is for. If we do have things that can't be solved, they'll work it out. However, I do believe that both AOL and Sun have given this organization a good deal of autonomy and a management structure that allows us to make decisions without having to escalate everything to a three-way conference call. Q But you are the one running this and you work for Sun. It appears that Sun is in control here. A I really disagree with that. This is an organization that has been formed with two parents. If you look at the staffing, it's reasonably evenly divided between Sun and AOL. It is our intent to keep going in that direction. Yes, we did have to choose someone to be in the GM spot and I interviewed with both people from Sun and AOL. Q It would appear that the Internet browser, the product that first defined Netscape, would be a big part of the overall alliance between AOL and Sun. But the browser development is not within your organization. Does it mean that Sun's Hot Java browser and Netscape's browser teams will remain separate? A The browser is certainly part of the overall alliance and collaboration between AOL and Sun. Because of the importance of the browser in the client area and the consumer areas we made a choice to run that in an organization that is parallel to what we are doing in this (organization). It will have people from Sun and people from Netscape working together. It will report through Barry Schuler at AOL. Q Some industry analysts say that you didn't give too many details about the browser effort because of the antitrust case against Microsoft. The software giant has argued that the alliance between AOL and Sun would strengthen the Netscape browser so much as to make the antitrust case irrelevant. A I really don't want to comment on the case. It is not appropriate for me to talk about that. Q Sun has agreed to pay a minimum of $1.2 billion in licensing fees to AOL. That's about a quarter of the price that AOL agreed to pay for Netscape when the deal was announced in November. Because of the size of that commitment, some analysts believe that the long-term plan is for Sun take over this joint organization and perhaps buy it outright. A No. The plan at this point is to make it successful and have it continue in this mode and keep it going . . . because it is working for both AOL and Sun. That's my intent, and it's the intent of everyone in this organization. Q The charter of the organization is to create e-commerce tools that run not only on Sun's Solaris operating system but on other platforms, including Microsoft's Windows operating systems and IBM and Hewlett-Packard Co.'s Unix variants. There's some skepticism in the industry that Sun would be committed to bolstering competing platforms. A We were really clear on that. To be a successful software company you run on the operating systems that your customers want to use. Certainly the Solaris OS is one of those. But there are others and the products already run on others. This is a cross-platform, multi-platform software company. It was before and it will continue to be. TOP OF PAGE ©1999 Mercury Center. The information you receive online from Mercury Center is protected by the copyright laws of the United States. The copyright laws prohibit any copying, redistributing, retransmitting, or repurp

To: bobby beara who wrote (23811)	6/23/1999 8:19:00 PM
From: RocketMan	Read Replies (1) \| Respond to of 41369

Rocketman, that is the very essence of investing, sponsoring an organization because you believe in its product and service and you believe the company has a business model that will provide long term growth of revenues and earnings and will re-pay the investors for the risk of sponsorship. I disagree slightly but critically. The very essence of investing in leading-edge tech stocks is sponsoring an organization because you believe that the masses do or will believe in its products and services, etc.... As I have posted several times previously, AOL is a product for the masses, not for the digitally gifted or even the digitally literate. I myself hardly use AOL, but I love the way its interface appeals to my wife and to those who hate having to deal with computers. AOL may do just that, but i think the idea that you can expect 100-300% annual gains ad infinitum is quite fanciful here. I agree, which is why I am a five-to-ten year investor. When did I say I expected such returns? My estimate for the end of the year, which I have posted eight months ago and several times since, is 150, which is only 10% off the year's high. The stock is way ahead of itself, pushed up by manic crowd behavior and by people who only take a ride with the momentum crowd - yes i confess to being one of those -ggg- Which is why I hope investors like you can push it down, so I can accumulate at lower prices. I win either way in the long run. So do you in the short term. This is win-win.

To: bobby beara who wrote (23811)	6/24/1999 1:53:00 AM
From: KENNETH DOAN	Respond to of 41369

" Given the high level of bullish advisors, the put/call ratios, and the low levels of mutual fund cash, i am doubting that we can muster enough liquidity for this. There was a big shot in the arm of liquidity that came in April, now those investors who bought AOL at the top and all the first day rises of NUTPO's are way underwater and trying to get cash advances on their credit cards to average down -g-" Bobby, hey, that's sound like me a week ago. But sold most of my long today (thanks for that little bullish) I was able to make a couple of points and got out, now I am just sitting on cash. Daytrade CMGI, and YHOO today, that was kind of fun (I have never done that before). Good luck to all the long.