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To: OFW who wrote (1328)	7/6/1999 8:05:00 AM
From: Howard Kirk	Respond to of 1530

Anyone know what is happening with AHS? Howard

To: OFW who wrote (1328)	7/6/1999 9:05:00 AM
From: ksuave	Read Replies (1) \| Respond to of 1530

What Wall Street Wants The Take July 01, 1999 by Phil Harvey Speaking at Scient Corp.'s customer conference Wednesday, Hambrecht & Quist LLC's top Internet analyst, Daniel Rimer, said that being first to market is not as important to e-businesses as being the first in their category to build a significant market capitalization. Rimer's slow, measured talk followed a fiery oration on the importance of "first-mover advantage" by Christopher Lochhead, Scient's chief marketing officer. Having a higher total market value than its competitors allows a company to use its stock as currency to out-market, out-bid and out-spend competitors, Rimer says. Two key ways to build a higher market capitalization are to cut costs and generate revenue. In fact, Rimer pointed out that Wall Street analysts view every dollar a business saves as $10 earned. While many Internet companies rush to sell their stock publicly, the first to arrive on Wall Street isn't necessarily the winner in its arena. Rimer reminded the crowd that though Onsale Inc. took its auction site public before eBay Inc., the latter became dominant because it was a better business—and more highly valued by analysts and investors. What does Wall Street look for in an Internet business? Generally, given the newness of the Net, profits aren't a priority. But Rimer explained that it is important for companies to give a "visibility of profitability"--to illustrate that their path does eventually lead to profits. If companies want to win Wall Street's favor, they should also show they have the infrastructure in place to sustain their business. He cited Amazon.com's staff of over 430 engineers charged with helping the business scale and grow as a good example. Analysts look for supply chain control, too, Rimer said. Automating transactions between a business and its customers and suppliers can help companies cut costs and deliver products and services faster. The criteria by which Wall Street judges Internet businesses has certainly changed in the last couple of years. Revenue growth and customer acquisition used to be the main areas of concern, and the path to profits didn't have to be as clear as it does now. These days, though acquiring customers is still essential for businesses, the Street favors companies that can show what Rimer calls, "customer centricity through rapid growth." In other words, a company should be able to show investors that it has a significant number of repeat customers--not just that it's gaining new customers. The BDCs Of course, the rules are slightly different for established companies that have yet to build an Internet presence. Rimer says the Street isn't likely to reward those companies as readily as it does new e-businesses. While slower to jump in the water, established companies don't have to stand by and watch their e-business counterparts walk all over them. There are things those old timers (Rimer calls them "big, dumb companies") can do to keep the Street from rejecting them—like it did to USA Networks when it said it might buy Web portal Lycos Inc. Rimer recommends that established firms looking to acquire online assets should take it slow--perhaps first invest in the firms they're interested in, with the intent to learn as much as they can about moving their business online. The Experience As Rimer's talk winded down, he brought up an issue that e-businesses have overlooked when preening themselves against their competitors. Firms that are obsessed with comparison shopping and offering a better price on commodity items often forget to consider their overall consumer experience. Though creating a great user experience isn't a new concept, it does bear repeating given the glut of sites that seem to think that price matters above all else. If price differentiation were that big a deal, why would anyone ever drink Starbuck's coffee? Phil Harvey is a staff writer for UpsideToday.com.