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

To: Stuart C Hall who wrote (1513)	3/10/2000 1:13:00 AM
From: A.L. Reagan	Read Replies (2) \| Respond to of 3070

re: Content is king. INSP is the King of Content. INSP is the current Prince (maybe Viscount or Earl) of Content Brokering and Packaging. Kings of Content Ownership are going to be the AOL/TWX's of the world. I agree with your analogy with respect to the carriers and the cable cos, to the extent of the transmission end of the business. That requires huge amounts of capital, and margins tend to suck pretty badly over time. I agree with you that wireless internet is hot, hot, hot. (No discernable revenues yet, but clearly a hot area). It's why I'm still holding QCOM even while others have left looking for the mo-mo de jour. It's so hot, that literally hundreds of well-financed, relatively established companies are entering the field, and some will be playing directly on INSP's turf. Two you might want to look into are little outfits called Microsoft and Oracle. Each has their own strategies, but content delivery is the focus. There are many others. INSP is mostly playing a brokering role. A slightly higher value-added role is playing publisher. Kind of like being the first guy who saw what Gutenberg had invented and saw all these thousands of monks scribing by hand and got the great idea of signing up a bunch of monks, getting there content on Gutenberg's press, and signing up a bunch of shopkeepers to sell the books. Now, the printing press was the ultimate discontinuous innovation of the last millenium. Five hundred years later, name a single book publishing entity with a market cap anywhere near close to $25 bil. Had today's system been in place back then, Gutenberg would have received a patent and license fees on every book printed, the monks would demand big advances and fat royalties, the booksellers would dictate pricing, and the broker/publisher would be squeezed in the middle. Now, as I said before, publishers and INSP perform useful functions. But you are kidding yourself if you think "it's all that" in terms of economic value added or that INSP's position as "first-hyper" gives it any insurmountable advantage against better-heeled new entrants in the space. I can tell you that if you think INSP will get a $1 at wholesale from data-enabled wireless phones per month, you've inhaled way too many press releases. Nothing close to it. The world is not going to pay this fee on an ongoing basis for any entity to perform this service. Period. Mullineaux, for the thousands of QCOM posts he's read, should have a pretty good feel for the generally cutthroat nature of all levels of the wireless biz. Nobody cares right now about INSP, because they are performing a useful service at a cost far greater than what their revenues are. So, if you are a content provider or a carrier, the typical INSP deal is both a money-saver and a time-saver, with time to market having the greater value righht now. But, as stated before, there is no sustaining above-average margin in the info broker/wholesaling/publishing business. And, if anybody thinks that INSP's software is some wonderful, proprietary code that no one else could write, egad. (I think Naveen looks across Lake Washington and has a bad case of Gates envy.) Other than quite a few "no asset/no business" OTCBB trash, INSP is the top of the heap in terms of stock price vulnerability. You know it, I know it, and so does everybody else. If you don't, I challenge you or anyone else to put forth a set of cash flow projections with defensible assumptions that PV's, at a market-risk rate, to anywhere near $25 billion. Stuart, lightening up sounds like a prudent thing to do. Nobody can take your cash away. You spotted the trend, took the risk, and deserve the reward. There will be some trigger event that will cause a stampede out of this issue, and it will first fall fast and furious, and then ooze into a long steady decline as the light goes on in the brains of longs who didn't quite get it first time around. Right now, I have no prediction as to what or when will be the trigger. There's a huge list of potential triggers - that just haven't happened yet. You successful bullet dodgers deserve the rewards. Too bad some of your INSP comprades will take 'em in the heart.