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Strategies & Market Trends : LastShadow's Position Trading -- Ignore unavailable to you. Want to Upgrade?

To: HandsOn who wrote (22272)	9/24/1999 2:08:00 AM
From: Jeffrey Lee	Read Replies (1) \| Respond to of 43080

Portion of Raging Bull's Weekly Cyberstock Interview with Cyber-Analyst, Steve Harmon: ragingbull.com Cyberstock: B-to-B is definitely the hot topic of the moment. Out of this group, what companies really stand out in your mind right now? Harmon: Well, it's hard to find value, because everybody's jumping on the latest wave and they're driving up valuations. I'm always a valuation guy trying to find fair value, or even something undervalued. A lot of them that I do like have gone too far north for me, so I'm looking under the hood further. I feel like BackWeb (BWEB) is going to be an interesting story for next year. Most people don't know what they do. They're not really understood in terms of their "dynamicness," or whatever you want to call it. They have such a range or possibilities that they can do with their software. I call it smart data delivery, or "FedEx for data." Think about "FedEx for data" and what you can do on commissions based on data delivery. Right now, there doesn't seem like a market for it, but think about the future when there will be. When you've got to know - who got it, when they go it, and when they signed off on it. Data has to be accountable in the future. Cyberstock: Are there any cable stocks that appear attractive to you right now? What are your thoughts on the upcoming IPO of Paul Allen's Charter Communications? Harmon: I like Charter. I used to cover cable at [Paul] Kagan [& Associates], so I'm familiar with the whole deal. I like Charter Communications, but I'm waiting for Paul [Allen] to really put his package together. Cyberstock: When are we really going to see this pckage of all of Allen's "Wired World" investments really converge? Harmon: I think Paul's got to roll these things up at some juncture, maybe late next year, bring the Wired World into a "one world" kind of idea. So I do like Charter, but I'm kind of playing High Speed Access (HSAC). I would play that as a way of thinking about Paul. Look at the ExciteAtHome (ATHM) valuation on a relative basis. Cyberstock: What's your take on the recent moves by Microsoft (MSFT) with MSN? Harmon: I think Microsoft should spin off its Web properties. Cyberstock: They certainly haven't pulled the trigger so far, though. Harmon: I think Microsoft has a hard time thinking like an Internet company, and thinking of value and pure play and what that means to their employees. For a competitive marketplace, you're going to have [to have] the Internet stock as a currency, not Microsoft stock, which of course has already had its run for the most part. You're not going to get the bang like the early guys at Microsoft got out of Microsoft [stock] if you join today. That's simple economics. Cyberstock: What does the future really hold for Lycos (LCOS), in your opinion? Can they really thrive as the last remaining independent portal, or is it logical for them to be taken out by a traditional media player or larger Web entity? Harmon: I think what makes the most sense, given the Viacom (VIA) and CBS (CBS) merger, is [for Viacom/CBS] to take out Lycos. The whole big thing about this $38 billion merger is that it's big news, but it's kind of old news. You're not really creating a lot of new value. You're creating just a bigger pie. Cyberstock: If you're CBS' Mel Karmazin, most of the Web sites he has acquired minority stakes in recently, outside of CBS MarketWatch (MKTW) and SportsLine USA (SPLN), really look second-rate to me. He's still missing a crown jewel property like Lycos to tie it all together. Harmon: The thing I like about Lycos is that I think it's undervalued now. It ought to be a $5 billion or $6 billion entity, at least. That's just sort of without a premium, maybe then [with a premium Lycos is worth] $6 [billion] or $7 [billion]. I think a Viacom/CBS take-out is a natural hunter for Lycos. You've got to have an Internet media presence in a major way. Otherwise, all their offline properties don't have as much value. They don't have the spigot to the future. Cyberstock: Let's peer into the Harmon crystal ball for a second? Harmon: Yeah, the crazy eight? Cyberstock: Besides the obvious growth of broadband and all the plays that come along with that, and the recent "clicks to mortar" movement with the e-tailers, what trends do you see unfolding over the next year? Harmon: I don't think we're in a mass market Internet yet. I think we're all assuming that we're in mass market. It's like going on trip and leaving your biggest piece of luggage behind. I think what's coming in the next 12 to 18 months that I would call the biggest wave is "mass market Internet." [This is] where [the Internet will be] becoming more of an indispensable tool for consumers and businesses. I think that's the major macro thing. But I think people might not be thinking about it. They may think that we're already there; we're not. Cyberstock: Sun Microsystems (SUNW) recently acquired StarOffice, and announced plans to launch a free version of this office productivity suite called StarPortal later this year. It's of my opinion that Sun will invariably end up partnering with America Online (AOL) and other portals down the line to offer these office applications online. It's almost as if Microsoft's fear of AOL turning into a competing operating system is indeed around the corner. Harmon: Well, last January, I did a piece that said Yahoo! (YHOO) was an OS. Basically, the Internet is the operating system now. I think I would agree with what Sun was billing as "the network is the computer." I switched that around and said, "the computer is the network." So I saw it coming; it's here. I think it's all about users. [It's] not about clients, or client and server. It's more about users - people. It's not about selling licenses to software, it's about selling services. That's one of the reasons that I think AOL is undervalued.