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To: Glenn D. Rudolph who wrote (94893)	2/25/2000 4:05:00 PM
From: Slumdog	Respond to of 164684

Good Man, Glenn. Nothing wrong with taking profit........

To: Glenn D. Rudolph who wrote (94893)	2/26/2000 10:49:00 AM
From: H James Morris	Read Replies (1) \| Respond to of 164684

Glenn, glad to see you made some money on Cmrc. This came from the street.com. >Banner Ads in Aisle Five America Online (AOL:NYSE) said Tuesday it had signed a $60 million deal with soon-to-be-public HomeGrocer.com, the Seattle-based competitor to Webvan (WBVN:Nasdaq), Peapod (PPOD:Nasdaq) and other online grocery stores. The news came from AOL, of course, because HomeGrocer is in registration with the Securities and Exchange Commission and therefore can't ballyhoo its own business deals. AOL can, though. And should. What AOL gets is $60 million over five years from HomeGrocer.com. What HomeGrocer.com gets, with limited exclusivity (meaning that AOL can do less prominent deals with other grocers), is promotion on numerous AOL sites, including its Digital City local sites. As HomeGrocer primarily operates for now in the Pacific Northwest and in Southern California, any advertising broadcasted over AOL's prodigious network simply will vanish into the ether. To HomeGrocer's benefit, it didn't give up any equity to AOL, the pound of flesh the Dulles, Va., company is particularly adept at extracting in situations like this. To HomeGrocer's detriment, it's paying an awful lot of money -- $18 million in fiscal 2000 alone, according to a HomeGrocer filing with the SEC -- for ads that initially will hit a lot of noncustomers. The deal also contains provisions whereby AOL can eliminate or reduce HomeGrocer's limited exclusivity after two years. One final note: This deal is a perfect example of the Internet keiretsu at work. Remember, HomeGrocer is a full-fledged member of the Kleiner Perkins-Morgan Stanley-Amazon.com keiretsu, to which venture firm The Barksdale Group also belongs. Former Netscape CEO James Barksdale is on the board of AOL and HomeGrocer; his venture firm is an investor in the former company. HomeGrocer will dedicate a small portion of its $242 million it hopes to raise in its IPO to paying off a deal with AOL. Follow the money: Keiretsu banker (Morgan Stanley) raises money for keiretsu company (HomeGrocer) which pays a tangential keiretsu member (AOL) as well as an investor and keiretsu member (Amazon). HomeGrocer, by the way, is paying Amazon, its largest shareholder, $10 million for advertising.