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Technology Stocks : AUTOHOME, Inc -- Ignore unavailable to you. Want to Upgrade?

To: Jay Lowe who wrote (17695)	12/8/1999 7:08:00 PM
From: E. Davies	Respond to of 29970

I know this is a peculiar analogy, but consider how Microsoft sells both the platform and applications running on it. I thought of that analogy too, but it has one flaw. Microsoft does not sell its operating system directly to the application vendors, with one the only exception I know of being IBM. Guess what Microsoft did to IBM? Threaten to raise the prices on Windows if IBM did not downplay IBM software that competed with Microsoft Office. Nasty business and no checks & balances except the DOJ. What is to keep ATHM from charging anything they want to from their competitors? Eric

To: Jay Lowe who wrote (17695)	12/9/1999
From: Jay Lowe	Read Replies (3) \| Respond to of 29970

Here's my hack at two alternate valuation models. The first is an attempt to consider the effect of ATHM effectively unbundling it's access (transport) fee from it's ISP service fee. Such unbundling may be viewed as the result of adding competitive ISPs at the IP transport layer. I have randomly used the assumption that ATHM would keep 100% of access subscribers and 50% of ISP subscribers -- for whatever reason. The share price is projected on a sum of the parts basis. The second is a valuation of ATHM on a subscriber annual value basis similar to that often used for AOL, etc. Just fiddling around to see what happens in the unbundling scenario ... comments/corrections welcome. Interesting that the first model predicts $44 at 1M subs. I swear I didn't cook the number. Cook your own. ;-) halcyon.com