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Technology Stocks : eToys Inc. (ETYS) -- Ignore unavailable to you. Want to Upgrade?

To: Rajiv who wrote (618)	8/11/1999 8:48:00 AM
From: Rajiv	Read Replies (2) \| Respond to of 1330

eToys Signs $18 Million Marketing Agreement with America Online Link - biz.yahoo.com The previous agreement - We entered into a marketing agreement with AOL, the leading Internet online service provider, in October 1997. This agreement established us as a provider of children's toy products featured on the AOL Network and AOL's Web site, aol.com. In addition, AOL agreed to prominently promote and advertise eToys on a non-exclusive basis in online areas controlled by AOL specified in the agreement. Furthermore, under the agreement, AOL has committed that AOL users will annually access the online areas promoting eToys a specified number of times. Over the 26-month term of the agreement, we are obligated to make minimum payments totaling $3.1 million to AOL, of which $1.1 million remained to be paid as of March 31, 1999. We have also agreed to offer for sale a substantial selection of children's products, to feature different children's products each week, to offer special deals to AOL users through the AOL online area, to provide children's toy products that are competitive in price and performance and to manage, operate and support such content and children's toy products. The agreement with AOL expires on December 31, 1999; Regards, Rajiv

To: Rajiv who wrote (618)	8/12/1999 8:25:00 PM
From: gtc123	Read Replies (1) \| Respond to of 1330

Rajiv, Again, I think your P/S analysis is a little biased. First, you can't take eToys quarterly revenue to base a judgement simply because their sales are so weighted towards the 4th quarter. I think 90%+ of their revenues last year were from 4th quarter sales. I'm not saying it's going to be the same this year, but if you took a market cap/annual revenue figure, it wouldn't be as crazy. OnSale is more a b2b auction exchange. eToys is a b2c e-catalog company. Two different models. You're saying ONSL trades at 4x revenues. I'm saying that other leading b2c e-catalog companies trade at 10x-20x revenues. And, I do think you have to say that eToys is one of the top tier e-commerce companies out there simply because it was the #5 site (not retailer) on the web last Christmas, and it has tremendous brand name recognition with consumers. I agree with you that gross margin and revenue growth rate should be considered. In that regard, clearly eToys revenue growth rate is spectactular. And, their gross margin hovers close to 20% which is very solid (ONSL is 10%). eToys is clearly going to invest a lot into winning this Christmas. I think it could be a very interesting (if not positive) few months...