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To: Clint E. who wrote (22055)	7/15/1999 4:48:00 AM
From: Clint E.	Read Replies (2) \| Respond to of 70308

Thursday July 15 2:10 AM ET,,,Inktomi's Quarterly Loss Smaller Than Forecasts SAN MATEO, Calif. (Reuters) - Inktomi Corp (Nasdaq:INKT - news), which makes Internet search software, Wednesday reported a fiscal third-quarter loss that was smaller than most forecasts, as the company's sales more than tripled. The company said it suffered a loss of $5.2 million, or 10 cents per share, in the three months ended June 30, excluding charges related to its acquisition of the Impulse Buy Network. Including those charges, the company had a net loss of $6.3 million, or 13 cents. The consensus among analysts had been for a third-quarter loss before charges of 12 cents a share, according to First Call Corp., a research firm that tracks such estimates. In the year-ago period, the San Mateo, Calif.-based company lost $6.3 million, or 15 cents. Inktomi recently acquired the Impulse Buy Network in a move to apply its popular search technology to online shopping and build a service that would help people find the best buys. During the latest quarter, it also launched a new Directory Engine, which combines pure search technology with enhancements to help prioritize and sort results. The company said its third-quarter sales more than tripled to $19.6 million from $6.3 million last year. __========_________==========_________===========__ Inktomi sales up threefold Loss is less than expected; caching sales soar By Bambi Francisco, CBS MarketWatch Last Update: 8:52 PM ET Jul 14, 1999 Internet Daily Net headlines SAN MATEO, Calif. (CBS.MW) -- Inktomi tacked on another solid quarterly performance Wednesday as the Internet infrastructure software company surpassed analysts' expectations by reporting narrower-than-expected losses thanks to a threefold surge in sales. "Wow," said David Hilal, an Internet analyst at Friedman, Billings, Ramsey & Co., who expects to raise his estimates and price target. "It was an extremely strong quarter along its core businesses." "It provides further evidence that the company continues to execute in all of its key businesses, which include portal services and network products," said Robert Fagin, an Internet analyst at Bear Stearns. After the market closed, the San Mateo, Calif., company reported a loss of $6.3 million. Excluding one-time acquisition charges, operating losses came in at $5.2 million, or 10 cents a share, narrower than both the 13-cent loss reported in the year-ago period and the 12-cent loss expected on Wall Street. Quarterly sales shot up to $19.6 million, beating sales projections by 14 percent and up from $6.3 million a year ago and $14.6 million in the previous quarter. Sales from Inktomi's network products division, which includes its fast-growing caching software, grew 286 percent. Portal service sales grew 141 percent. "What's driving the demand for caching" is that "data networks are interested in having content stored in their networks because that becomes a launching pad for new services, like streaming audio and video," said David Peterschmidt, in an interview with CBS MarketWatch. "So, we expect demand to stay in place." Peterschmidt also said that sales from caching would account for 55 to 65 percent over the next year. After the news, shares of Inktomi (INKT: news, msgs) were barely changed in after-hours trading on Instinet. The stock rose 3 5/16 to 128 7/8 in regular trading. Key metrics Inktomi also said search queries grew by 13 percent sequentially to over 2.4 billion, slightly below analysts' most optimistic projections. Peterschmidt would not project sequential growth in the future quarters. However, he said on an annualized basis, search queries grew 52 percent organically. Contribution from America Online (AOL: news, msgs) will not impact queries in the near-term, Peterschmidt said, explaining that Inktomi's search service for the portal will "go live" at the end of the quarter. As for Inktomi's shopping technology, Petershmidt said the number of products being offered has grown to 4 million, up from 2 million in April Solid growth it seems but Peterschmidt said the shopping business is viewed "as an evolution" with three to four quarters needed for the technology to "become a mainstream product. "We don't know how fast the rate of adoption will be (for shopping)," he said. "Christmas will be the litmus test for us." But while the market to facilitate shopping online is projected to grow to $30 billion in 2002 vs. $4 billion for caching, Petershmidt couldn't judge if sales from shopping would eventually surpass that of caching until after the holiday season. He did add, however, that the company would make acquisitions or investments to "accelerate time-to-market" for the company's products, including the shopping technology. He also said that a number of companies with shopping applications are "interested in our database and we think there may be synergies there." Asked about competition from Novell (NOVL: news, msgs) and Network Appliance (NTAP: news, msgs) and Cisco Systems (CSCO: news, msgs), Peterschmidt said Inktomi is the only company that offers an "open-software architecture approach" which is what clients want. The solid results came the same day Inktomi announced that it has deepened an alliance with British Telecom. BT will deploy Inktomi's Traffic Server network caching technology to deliver next-generation Internet services in Europe. Separately, Alan Braverman, an Internet analyst at Banc of America Securities, initiated coverage on Inktomi with a "buy" rating and a $170 price target. See Inktomi preview story.

To: Clint E. who wrote (22055)	7/15/1999 4:49:00 AM
From: Clint E.	Respond to of 70308

Thursday July 15 2:11 AM ET,,,EarthLink Posts Loss, Eyes Profit In 2000 By Scott Hillis PASADENA, Calif. (Reuters) - Internet service provider EarthLink Networks Inc. Wednesday posted a wider loss for the latest quarter, but said it was on track to climb into the black by early next year. Pasadena, Calif.-based EarthLink reported a loss of $6.87 million, or 21 cents a share, for the second quarter. Although the loss was slightly wider than the year-ago loss of $4.8 million, or 20 cents a share, EarthLink edged out Wall Street consensus estimates of a loss of 22 cents a share. Revenues more than doubled to $78 million from $37.9 million. The losses were prior to goodwill amortization stemming from EarthLink's June 1998 deal with Sprint Corp. (NYSE:FON - news) in which it acquired the telecommunication company's Internet assets and struck a promotional agreement. Including those charges, EarthLink reported a loss of 88 cents per share compared to 53 cents a share in the year-ago period. However, Chief Financial Officer Grayson Holberg said the charges did not reflect cash leaving the company and were included to comply with accounting regulations. EarthLink, one of the fastest growing Internet providers in the country, goes head-to-head with America Online, Microsoft Corp.'s (Nasdaq:MSFT - news) MSN service and AT&T Corp.'s WorldNet. But the company, founded in 1994 by its now 27-year-old-chairman, Sky Dayton, has yet to turn a profit as it spends heavily on programs to attract new customers. The company added a net 180,000 paying users in the second quarter, bringing its membership to nearly 1.4 million, Chief Executive Garry Betty told a conference call. Another 200,000 people are expected to jump online with EarthLink in the third quarter and 270,000 in the fourth quarter, he said. ''Those numbers reflect increased spending in sales and marketing and I think our net customer additions show that we are spending that money wisely,'' Betty said. Betty forecast Earthlink, which is about 26.5 percent owned by Sprint Corp., could start turning a profit by the first quarter of next year if it met its target to boost profit margins to 67 percent from 57 percent in the second quarter. Wall Street analysts expect EarthLink to turn a profit of 6 cents a share in next year's first quarter, according to First Call. EarthLink's investment in adding capacity had kept growth in check, Betty said. EarthLink's spending on capacity meant it could handle up to 2 million members through its 2,300 points-of-presence, the facilities that let members dial up to the service. Betty was bullish on EarthLink's prospects for signing up more customers for its fledgling high-speed service, which was boosted Wednesday by a deal with MCI WorldCom's UUNET to provide nationwide digital subscriber line service. While EarthLink's DSL service was still in a trial phase, an estimated 10,000 people would be using the service by the end of the year, at a cost of $40-$60 a month, he said. Close to 100,000 are seen using DSL by the end of next year. ''As we start commercially rolling out this network ... EarthLink is in a very good position to show significant growth in broadband services,'' he said. EarthLink stock fell $1.375 to $64 a share on the Nasdaq trading system Wednesday.

To: Clint E. who wrote (22055)	7/15/1999 4:50:00 AM
From: Clint E.	Read Replies (1) \| Respond to of 70308

Thursday July 15 2:32 AM ET,,,,Motorola Upbeat On Second Half; Iridium Woes Mount By Emily Kaiser CHICAGO (Reuters) - Wireless phone and computer chip maker Motorola Inc. (NYSE:MOT - news) said Wednesday it expected to post strong earnings in the second half of the year amid prospects for brisk digital phone sales and improvement in the semiconductor industry. However, Motorola's shares fell after the company said global satellite phone company Iridium World Communications Ltd (Nasdaq:IRID - news). may face bankruptcy or liquidation. Motorola owns 18 percent of Iridium and is the primary financial backer. In a conference call, Schaumburg, Ill.-based Motorola said it expected to meet analysts' earnings and revenue expectations for the third quarter and full year. Analysts were expecting Motorola to earn 51 cents a share on revenues of $7.8 billion in the third quarter and $2.00 a share on revenues of $31.6 billion for the full year. That would far exceed last year's third quarter operating profit of 7 cents a share and sales of $7.2 billion. In 1998, full-year operating profits before restructuring charges were 58 cents a share on revenues of $29.4 billion. Motorola Tuesday reported a second-quarter operating profit of 44 cents a share, well above last year's one cent a share. Both periods exclude one-time items. The earnings per share topped Wall Street expectations for 41 cents a share. ''The conference call was pretty upbeat,'' said Mona Eraiba, telecommunications analyst with Gruntal & Co. Eraiba said strong performance in digital handsets and improvement in the semiconductor sector contributed to a bright outlook. However, Motorola's shares fell $1.625 to $94.875 in composite New York Stock Exchange trading after it said cash-strapped Iridium had three options: an out-of-court restructuring, Chapter 11 bankruptcy protection, or liquidation. Including loan guarantees and other investments, Motorola said its financial exposure to Iridium was $2.2 billion at the end of the second quarter, although it has built reserves to cover part of that total. ''It is Motorola's hope that this last scenario (liquidation) can be avoided,'' said Robert Growney, president and chief operating officer, in a conference call. Growney reiterated the company's stance that it would not increase support for Iridium unless the other backers also contributed. An Iridium spokeswoman said the company was working with its lenders to reorganize its debt, but was not aware of any consideration being given to liquidation. Iridium's shares fell $1.00, or 12 percent, to $7.125 in midday trading on the Nasdaq. Credit Suisse First Boston lowered its recommendation on Iridium to sell from hold. Iridium has had trouble signing up subscribers to its pricey system, which allows customers to make phone calls from anywhere in the world via a network of low-earth orbit satellites. Critics say the phones are unpopular because they are too bulky and require a line-of-sight connection with the satellites, which means they don't work inside or in cars. Iridium's lenders have extended its $800 million credit facility three times and analysts have said the company is in danger of defaulting. Interest is due Thursday on Iridium's high-yield bonds, with an automatic 30-day grace period. Ed Gams, head of investor relations for Motorola, said Iridium and its backers would hold ''significant discussions'' about Iridium in the third quarter, but said Motorola would not comment on those talks until some conclusion was reached. ''I believe they'll (Iridium) get over this current hurdle,'' said Timothy O'Neil, an analyst with SoundView Technology. ''Management understands that there is a problem, and they've addressed the problem internally. All that has to be followed up with some sort of attraction of customers.''