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To: Olav who wrote (14)	11/16/1999 3:45:00 PM
From: Glenn Petersen	Respond to of 218

Fuel for the fire. Steve Harmon's take on CFLO: Tuesday, November 16, 1999 Will Cache Flow IPO live up to its name? It's not quite an Akamai (AKAM), but it's much easier to pronounce. Here comes the IPO from Cache Flow (proposed ticker CFLO), which wants to sell 5 million shares at $12 per share. Anything that speeds up the World Wide Wait has been hot all year, no matter if it's software, hardware, data centers, DSL or wireless. Cache Flow makes equipment that stores popular files in several computers on the Internet distributed in different locations, allowing a shorter distance physically for the data to transfer when requested from a user. Not size but physics matter in the digital distance arena. That bodes in Cache Flow's favor and we think it makes it one of the ones to watch this week as it goes public. Nearest kissing cousin Inktomi (INKT) dominates the market with AOL, Microsoft and Yahoo among its customers. Cache Flow counts HP, Xerox and Delta among its clients. Sales hit $7 million for fiscal 1999 ending April as the company screams into a market made for speed - or demanding it. Driving value is not sales in our view but future consolidation. Let's take a look at the numbers: CacheFlow CFLOShares offered 5.0 Target share price $12.00 Proceeds $60.00 Shares out 32.6 CFLO IPO cap $1,956.00 AKAM cap $15,705.00 INKT cap $6,669.00 In millions, (c) 1999/2000 e-harmon.com. Inc. Shares of rival Akamai soared on its recent IPO as the company's "Akamai" content tags and server network - more than 1,600 servers globally - propelled AKAM to $15 billion market cap as of Nov. 15. Meanwhile, the market cap for longer-running Inktomi (INKT), which used to enjoy the public fascination with cache all to itself at one point, was $6.7 billion. Inktomi may have some value left on the table in its search wholesale side, which powers Yahoo, HotBot and other larger portals. Its wholesale search alone is probably worth $3 billion in our view. On Cache Flow, here's one item of note that could provide clues to who ought to ultimately own this piece of the solution. Network giant Lucent (LU) resells Cache Flow, making us wonder why Lucent won't someday own Cache Flow outright. It needs to. Lucent and others such as Nortel (NT) need these sorts of turnkey pieces to offer their own clients. Lucent and Nortel compete with Cisco and they all want to be in the cash flow business with cache or similar solutions. No matter what the public values Cache Flow at, we think the ultimate owner is in the land of the giants. For now Cache Flow looks like it may serve up its own speedy offering this week. Cache this IPO. ------------------------------------------------------------------------ Steve Harmon was named to "Best of Wall Street" by CBS MarketWatch. Readers of this analysis include Bill Gates, Jerry Yang, Esther Dyson, John Doerr, Dave Wetherell, Ann Winblad and thousands of investors worldwide. e-harmon.com is hiring! Do you have the right stuff to be CTO of a fast-paced, future-oriented Internet investing firm? Must be fluent in Web programming, database, popular protocols/platforms AND have the desire to have fun while applying business/investing sense to this unique position. Right salary and comp package for right person! To learn more, please send email to cto@e-harmon.com(principals only). Steve Harmon's Internet venture capital book, Zero Gravity, available now! Post a note to Harmon on SI! ------------------------------------------------------------------------ (c) 1999 e-harmon.com, inc. may be shared for non-commercial purposes, 100% intact, unedited. If you enjoyed this analysis please share it with a friend, or they can sign up now FREE at www.e-harmon.com.