Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Spyglass -- Ignore unavailable to you. Want to Upgrade?

To: Art Bechhoefer who wrote (1116)	10/20/1999 9:31:00 AM
From: Lane Hall-Witt	Respond to of 1412

I personally like the fact that SPYG is generating a broad mix of licensing and service revenues. This certainly does not have the wildly fantastic potential of PHCM's revenue model, licensing server software on a per-subscriber basis for a rapidly growing market. But this diversification is safer and, to me, shows that SPYG management has learned important lessons from the debacle in the desktop browser market. PHCM might become the MSFT of the wireless world. Or again, it might not--. The problems with service revenue are that gross profit margins are narrower than licensing and that there always is a need to generate new business. The consulting business will be there on an ongoing basis; getting that business consistently, though, means the company will have to incur higher marketing and sales expenses than would be the case in a straight licensing model. Obviously, services isn't a perfect business, but SPYG is right in the heart of an immense, volatile growth industry and I think is wise to pursue business on both the services and licensing sides. As for the accounting issues, I'm sure there are others more qualified to assess that than me.