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Technology Stocks : General Magic -- Ignore unavailable to you. Want to Upgrade?

To: Mike MacNaughton who wrote (6571)	6/28/1999 2:19:00 PM
From: Michael Feldstein	Read Replies (2) \| Respond to of 10081

Mike: A few points: 1. The issue you raised was cash flow, not profits. I don't necessarily expect that GMGC will see much in the way of profits from myTalk (although we may be pleasantly surprised). Profits will have to come from Portico, magicTalk, and Kenya licenses. myTalk probably won't change any of that. What it does do is increase revenues and cash flow, both of which GMGC needs right now. If you believe that myTalk will break even or better while generating cash flow (not to mention mindshare), then I think you have to view it as a smart move on the part of management. 2. Markman has pointed out that it's the "drop-down" audio ads which have the most profit potential. He claims that, unlike banner ads, users won't be able to surf over the audio drop-downs, thus making them more valuable to advertisers. He may very well be right; time will tell. In any case, I think myTalk must be viewed as a piece of the company's strategy and not the main profit engine. In that context, it's hard to find fault here.