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To: Randy Ellingson who wrote (67237)	7/12/1999 12:01:00 PM
From: Eric Wells	Respond to of 164684

I must admit to not having strong knowledge of Broadcast.com as a company - I think I've only been on their site once. However from a fundamental perspective, I see the following negatives with regard to the $6 billion purchase price: 1. I think it's hard to justify a $6 billion price tag for a company that is $17 million in the red, and has annual sales in the $30 million range. 2. The company does not appear to utilize any proprietary technology - it is essentially a site that offers streaming video and audio for various radio and television broadcasts. As such, their site could be easily copied (assuming a sizable investment). I could be wrong on this point - perhaps they do have some proprietary or patented technology they are using. 3. I see them facing serious competition in the future from a number of other companies, including AOL, Microsoft, and any of the mainstream media companies that have yet to establish a strong presence on the web. But again, fundamentals have never had much of an impact on net stocks. And many would argue that Broadcast.com benefits tremendously from first mover advantage - and that their position will be strengthened by being a part of Yahoo. However, I am of the opinion that fundamentals will at some point become important for net stocks - but who knows when. Yahoo is actually probably making smart moves in using its stock as currency - despite inflated prices. If you think about it, Yahoo could have waited until net stock prices come down some (assuming they do) and have paid a lower price for Broadcast.com (assuming it would still be available) - however, Yahoo may have ended up using the same amount of shares under such a scenario - and as such the impact would be the same (and waiting may have resulted in Broadcast.com being purchased by someone else). The purchase of Broadcast.com by Yahoo is speculative - regardless of whether Yahoo's stock price is $150 or $70 - but paying $6 billion for a company that is $17 million in the red on the face of it appears to me like an outright gamble. -Eric Wells