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

To: Elwood P. Dowd who wrote (69704)	10/23/1999 2:25:00 PM
From: hlpinout	Respond to of 97611

Poor E.P. Forbes Nov. 1 -- After a humiliating fall from grace, Eckhard Pfeiffer is back, hooking up with a Web firm that offers the ultimate in product placement. Fall and Rise By Nikhil Hutheesing ECKHARD PFEIFFER IS STILL STUNG over the way he was fired from Compaq Computer six months ago. "They let me go in the worst possible way," he says. "I had just come up with a recovery plan. Then bam!" But he has found solace by going back to his roots. In October he became chairman of Intershop Communications, a fast-growing e-commerce shop founded by a fellow German, 29-year-old Stephan Schambach. When Pfeiffer, 58, was riding high at Compaq, Schambach had courted him to join Intershop's board, without success. But as Compaq collapsed and Pfeiffer was canned in April, he was at a loss over what to do next. "Retire? I will never retire." He soon came to believe that San Francisco-based Intershop is on to something big. Its e-commerce software runs 40,000 storefronts on the Web, including outposts for Electronic Arts, Celestial Seasonings and Harrods. Its newest software could take on-line sales to a whole new level. It allows for the ultimate product placement. Imagine you are on-line and checking out the last cover of FORBES and just love that red necktie worn by John Malone. Click on the tie--and you can buy it instantly. No visit to the tiemaker's site is required. The potential is enormous, letting any site on the Web double as a store window. Enticing Web sites and marketers to use it will be a gargantuan job, but Pfeiffer says he can help. "I turned Compaq from a small company with troubles into a computer powerhouse. We can do the same at Intershop." "Our goal is to let companies do e-commerce anytime, anywhere," says Schambach, chief executive. "This will become the new form of advertising. Firms will make money on the Web by letting others sell things at their sites." Intershop aims to sell the new software for $50,000 to $2 million, although even Schambach hasn't quite figured out how to make it work. "This is a new business model. It will take some experimenting before companies figure out what works best." So far, it isn't clear who will be the biggest buyers of the new wares--the Web site where a product shows up, the marketer of that product or some middleman working those two ends. Some sites may take a dim view. "We have enough challenges representing our own slew of products without having to sell other stuff on our site," says Gino Castro of Electronic Arts. But Pfeiffer and Schambach profess to be unconcerned. Schambach and two partners founded the company in 1992 in a rundown vicarage in Jena, in the former East Germany. Schambach moved to San Francisco a year later and targeted the on-line market. Today such clients as BellSouth, MindSpring and Deutsche Telekom use Intershop to outsource virtual shops for many companies. Last year that business brought Intershop $20 million in revenues, and sales will top $45 million this year. Schambach expects Intershop to be in the black next year, when he may also list the company's shares on Nasdaq. Intershop has already had a great ride on Germany's Neuer Markt. Its shares have surged 800% since the company went public in 1998 at $15 (split-adjusted). It is now valued at $2 billion. That let Schambach, two cofounders and 60 employees become East Germany's first homegrown multimillionaires. \|