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Technology Stocks : CMGI What is the latest news on this stock? -- Ignore unavailable to you. Want to Upgrade?

To: bargainman who wrote (13354)	9/29/1999 11:46:00 AM
From: James Thompson	Read Replies (1) \| Respond to of 19700

OT - Steve Harmon letter to Steve Ballmer From steve@e-harmon.com Wed, 29 Sep 1999 02:05:43 -0700 Date: Wed, 29 Sep 1999 02:05:43 -0700From: Steve Harmon steve@e-harmon.com Subject: NetStock! by Steve Harmon 1999.09.29 Dear Steve Ballmer Dear Steve Ballmer: Having been an Internet stock analyst for 5 years now and seen the valuations of the tech and Internet sector rise with the prospects of the new tech ecomomy it was interesting hearing the news the other day where you said Internet and tech stocks were overvalued. Some are, some aren't. And then I remembered that July 24, 1997 you said the same thing only just pertaining to Microsoft stock. I noted at the time (July 1997) that Microsoft stock was trading at about $34 per share back then (split adjusted). September 28 MSFT closed at $92 1/8 after the market had adjusted MSFT per your comments. Flashback to summer 1997 and split-adjusted Yahoo (YHOO) traded at $8 per share; Amazon (AMZN) at $2 and change; AOL (AOL) at $8 per share; CNET (CNET) about $7; @Home (ATHM) at $10; and my-then favorite and totally-undiscovered CMGI (CMGI) at $1 31/32 per share. While I agree that we have seen a phenomenal rise in the tech and Internet sector it is based more on a key shift to a service-based model. Service describes an open channel from producer to end user that is ongoing and based on the flow of content and commerce. It contrasts with the application software model which sells units or licenses and not a channel. In a service model a company such as Yahoo is able to continue to bolt on new services and therefore revenue streams; or Amazon can put up more digital shelves and put more goods on those shelves; AOL can sell long distance, leveraging off its installed 20-million user base and billingsystem. It remains to be seen whether or not companies like AT&T (T) can do this, take their existing pipe and installed base and become more of a communications and commerce platform rather than just a telco which acquired a cable company. Service over pipes. Intel (INTC) is also becoming a Net service provider and opening data centers that can act as hubs for commerce/content. It is late to the game but that's a far cry from silicon. So Grove is making the switch toservices. In January 1998 in a report I mentioned that the Internet was now the OS, that Yahoo and AOL and all large-traffic sites now played key roles in navigating content and commerce and applications, which began to migrate to the servers. As services became more prevalent the value of the channel (direct via the Net) began to influence the Internet stock sector. Investors who missed the early Internet bandwagon only looked back in regret at missing YHOO at under its IPO price which it traded at briefly following its April, 1996 IPO. YHOO was a $3 stock in July 1996 and at its IPO I said it could be an AOL killer. Now 3 1/2 years later YHOO closed September 28 at $184 11/16 per share. As the Internet moves into broadband with DSL leading that charge investors re enthusiastic about the newer issues, thinking that this may be a renaissance of opportunity to get in on the next wave. I was there from 1994 before the first wave and this new wave has echoes of the past -- except that now 34% of all investors now own Internet stocks.In 1994 nobody did. In 1995 a few of the bearded ladies harley davidson investment club mayhave. In 1996 the ladies shaved. In 1997 the real wave of Internet IPOs began in earnest In 1998 Internet stocks finally shot up as investors began to believe it was more than hype or biotech genetic sampling oozing down the techscape In 1999 mainstream Internet investing began to emerge. I agree that there may be too much enthusiasm for the entire tech and Internet stock universe. Investors should take stocks on a case by case basis. Especially as the business-to-buiness wave now arrives. In 1994 I bet that the Internet would be the future at a time when everyone thought interactive TV was it. In 1999 I am betting that the next 10 to 15 years will transform every business and household with an array of Internet-driven services. I agree tech and Internet stocks are overvalued here and there and a pullback for those individual stocks should be in order. Yet still the entire 300 pure play Internet stock universe market capitalization still barely touches 2x MSFT market cap. p.s. I am a big fan of what Microsoft has done in embracing the Net. *********************************share this with a friend! they can sign up FREE at e-harmon.com