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To: rupert1 who wrote (77508)	2/5/2000 9:59:00 AM
From: rudedog	Read Replies (2) \| Respond to of 97611

Victor - re: AV is currently managed by the same President and staff, with some additions, who managed it when it belonged to (a) DEC and (b) COMPAQ Not true - Rod Schrock headed up CPQ's consumer division and joined AV only a month before AV was sold to CMGI... almost all of the DEC team left AV either just before the CPQ acquisition of DEC or shortly thereafter. The sale of AV to CMGI, among other things, allowed AV to retain some of the key technical talent who did not think CPQ would do any more with the property than DEC did, but believed in CMGI. Likewise the management of AV has been "upgraded" by the addition of key talent from CMGI... Whatever else we can say, AV was "rotting on the vine" at CPQ and could well have simply imploded from brain drain if CPQ had delayed taking action even a few months. I am increasingly impressed with the second half of your argument, but if folks are right - i.e. CPQ is now overweight with fuddy-duddy management from the glory days of DEC who have not had to make a responsible decision in years and "just don't get it" - then what chance did they have to do anything with AV?? I believe that Capellas needs to take stronger action to "clean the stable" and unload more of that old management structure. Services performance is weak, the "solutions business" is invisible, CPQ's storage play still depends for bragging rights on the CPQ classic storage attached to ProLiant systems while the StorageWorks business, which could be an EMC competitor, drifts in Limbo... Those are the things that require aggressive management attention IMO. I continue to believe that CPQ would only have screwed up any AV play and that unloading it was the right thing. It was a complete cultural mismatch at CPQ... they need to walk (as they are doing with the new consumer and commercial internet devices for example) before they try to run with the Internet hounds.

To: rupert1 who wrote (77508)	2/5/2000 10:37:00 AM
From: MeDroogies	Respond to of 97611

I never said AV would not have attracted a good IPO price, what I've said is that the likelihood is that despite a good IPO, the recent history of portals that have gone public is that they go public at a high price, but don't perform particularly well afterward. Ask Jeeves and About are struggling, @Home has performed poorly - before that Excite was a dying brand. AV is a secondary portal. It was 10th or 11th and climbing merely means that it was so far behind that it had no where to go but up. But it hasn't climbed, and IPO money wouldn't have helped. The competition in that space is very tight and the competitors had/have better resources. AOL, YHOO, Snap and MSN were/are way ahead. AV won't catch up, because it has relatively little to differentiate itself on. If you think otherwise, then you aren't in the business, and don't understand the dynamics. Your argument about the history of portal IPOs doesn't hold water. Look at DIS and GO....it was incredibly far behind...has enormous resources...and is floundering. How could AV have done any different?

To: rupert1 who wrote (77508)	2/5/2000 3:30:00 PM
From: Salah Mohamed	Read Replies (1) \| Respond to of 97611

Victor ... About AV >>>The history of IPO's in 1999 suggests that it would have raised more than $2 billion and after the IPO the value would have continued to rise.<<< Now, I don't understand your argument. CPQ realized more than three times your estimated $2B. Presently, CPQ own: - 41.6M shares of CMGI, Market Value ~$5B and rising. - 18.5% of AV In addition to the tremendous amount of money they got from this deal, the strategic alliance with CMGI opens several doors for them to be involved in the internet. Already, we have seen a deal involving CPQ, CMGI, and SII in china. Further, with the tremendous growth in the internet, CPQ will benefit greatly from being the preferred supplier of hardware and services for the 120 internet companies (going to 250 companies) controlled by CMGI. In all your discussions of AV you never seem to address the main topics at the time they made the CMGI deal. At that time, they were losing money on their operations (-$184M in Q2-99), S&P lowered their credit rating, they required $700M to $900M for restructuring, and their balance sheet was weak. In a word, it was a matter of survival. Clearly, the CMGI deal helped the company to survive and gave them the financial strength to be able to straighten out their problems. Presntly, their balance sheet is very strong which allows them to spend money as needed to fix their operational problems (e.g.; the acquisition of ICO distribution biz for $370M). IMO, the CMGI deal saved the company. Your argument and others that the shareholders would have been better off with an AV IPO by CPQ is totally out of sync.