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Technology Stocks : Inktomi (INKT) -- Ignore unavailable to you. Want to Upgrade?

To: Brian1970 who wrote (1495)	7/16/1999 11:15:00 AM
From: Millionairess	Read Replies (1) \| Respond to of 1945

Web proxy for shopping? Inktomi aims high CEO Peterschmidt: We're the only pure caching play By Bambi Francisco, CBS MarketWatch Last Update: 7:23 PM ET Jul 15, 1999 Also: NewsWatch SAN MATEO, Calif. (CBS.MW) -- Inktomi, viewed by many as a benchmark for Internet growth, may soon be considered the proxy for shopping online. With Inktomi's core caching technology surging 200-plus percent in the most recent quarter, investors expect the same execution and follow through when it comes to bringing the next hot application -- a shopping server -- into full swing this holiday shopping season. Indeed, Inktomi (INKT: news, msgs), named after a spider in a Lakota Indian legend known for defeating large adversaries with skill and adeptness, appears to be living up to its name, becoming a technology notable despite having been founded just three years ago. One analyst said the company is "sailing with a hurricane at its back." The coming holiday season could provide an additional gust, as long as Inktomi is prepared for it. Inktomi Chief Executive David Peterschmidt spoke to CBS.MarketWatch.com on Wednesday after the San Mateo, Calif.-based company announced better-than-expected quarterly results. Peterschmidt outlined the company's plans to gear up for the Christmas-shopping season -- and maybe do a little shopping itself. Tell us about your shopping technology and how it's being received, given that the holiday season is nearing. Peterschmidt: The shopping has gone into production now. It's live. We now have 4 million products, from high-quality providers like EToys, Barnes & Noble and 1-800 Flowers. We see business growing, and Christmas will be the litmus test for us. We're going to find out how much revenue and how fast that business will grow. We have cautioned the market that we see this as an evolutionary product; it's not one that's going to be mainstream overnight. It will take three to four quarters to become mainstream. How significant will the shopping application's contribution be to the overall revenue stream? Will it surpass caching, which accounts for about 60 percent of Inktomi's revenue now? Peterschmidt: We do not think it will. Anecdotally, shopping would represent a large opportunity -- it's projected to be a $41 billion market by 2003. We just don't know how fast the rate of adoption will be. What about competitors in the shopping space? There are several companies that offer a shopping solution, such as InfoSpace. Are they competitors? If not, and their products are complementary, would you consider working them? Peterschmidt: InfoSpace (INSP: news, msgs) has a product that's different from ours. Their approach is to help consumers through content aggregation. If you shop on InfoSpace, it's more like, I'm going to the yellow pages to look for the stores that sell CDs. Inktomi's shopping engine goes to the World Wide Web, and you can receive information on a particular product. The products are complementary, and, quite frankly, we're seeing not just InfoSpace but a number of other companies who have shopping products be interested in access to Inktomi's database. We think there may be synergies with those applications. Inktomi just filed for another secondary offering. Will you be making acquisitions to beef up your shopping technology? Peterschmidt: We're going to do purchases in a couple of different areas. We've always said if we can buy to bring our technology to bear -- that will accelerate time to market for our products -- we'll do that. The proceeds of the secondary will be for strategic acquisitions but also for investment in companies that will help further our architecture, like Sand Piper, which is doing content distribution. In shopping, if we can find other companies that will help us in the shopping space, most definitely we'll make the investment or an acquisition. Shopping is still a nascent application for Inktomi and caching, which grew like a rocket in the past quarter and is the company's core revenue-generating product. There are competitors moving into this space; how do you stay ahead of the curve? Peterschmidt: We're the only company that's a pure-play software for caching. That is, all of the other companies, whether it be Network Appliance (NTAP: news, msgs), Cisco Systems (CSCO: news, msgs) or Novell (NOVL: news, msgs) -- they've all decided they're going to embed a cache application on a proprietary piece of hardware under a proprietary operating system, and quite frankly the market is saying, That's not what we want. We want an open software platform because we want other software to be run on top of it like RealNetworks' (RNWK: news, msgs) streaming media player. So we're in a good position. On background: See Inktomi earnings and earnings preview stories. Also: Watch the video of this interview.