Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: KeepItSimple who wrote (96304)	3/13/2000 9:21:00 PM
From: Robert Rose	Read Replies (1) \| Respond to of 164684

<Just a daily table of canadian mining companies that have suddenly become B2B or internet companies, magically, overnight.> A friend of mine runs a process control company. He asked me what sectors I invest in. I told him b2b, wireless and biotech. He said, "ok, we're b2b." I said, "Just keep telling the vc's what they want to hear." <g>

To: KeepItSimple who wrote (96304)	3/13/2000 9:36:00 PM
From: H James Morris	Read Replies (1) \| Respond to of 164684

Kis, name us one stock you haven't lost your ass on? Imhop you need to go back to work... soon!! >On the surface, it seems like the buzz surrounding business-to-business bellwethers, such as Ariba Inc. {ARBA} and Commerce One Inc. {CMRC} might be founded on some reasonably solid ground. If the business-to-business market, commonly called B2B, is as large as the pundits say, and if companies like these are able to get a small slice of every transaction conducted through the online-trading exchanges they help set up, perhaps price-to-sales ratios of 280 aren?t as ridiculous as they seem. (Perhaps.) After all, fat streams of high-margin, recurring revenue are worth a pretty penny. The problem is that the attractiveness of fat streams of high-margin, recurring revenue hasn?t been lost on the large companies to which Ariba and Commerce One market their services. And if Commerce One's recent deal with the Big Three auto makers is any indication, B2B players may be increasingly shut out of the transaction stream by the bricks-and-mortar companies using their services. Ford, General Motors and DaimlerChrysler Create World's Largest Internet-Based Virtual Marketplace My colleague Joseph Beaulieu, who follows the B2B players, points out an interesting detail of the Big Three deal to me: The two companies building the exchange, Commerce One and Oracle Corp. {ORCL}, will have a fairly small ownership stake in the online auto-parts supply exchange. From the relatively few financial details of the deal that have been released, it seems that the B2B folks are being relegated to the role of technology suppliers, rather than intermediaries positioned to get a slice of every transaction. According to a recent article in The Wall Street Journal, the recent deal between Ariba and the Kraft Foods unit of Philip Morris Cos. {MO} followed a similar pattern. Kraft bought Ariba's technology for a lump sum without keeping Ariba in the middle of the recurring revenue stream. There is nothing wrong with licensing fees and the service revenue that comes with the typical software sale, since they both carry pretty good margins. But there is a world of difference between being smack dab in the middle of a multibillion-dollar revenue stream and just selling and supporting your technology as any other software vendor does. Is Repricing Stock Options Sensible? The companies, in fact, are pinning their hopes on getting in the middle of this revenue stream. As Commerce One noted in the prospectus for its IPO last year, "Our revenue growth will depend upon realizing significant transaction and Marketsite access fees in the future." Would Commerce One, for example, have a market cap of $16 billion on sales of $34 million if it were viewed as a software vendor instead of a B2B intermediary? Seems to me that the B2B crowd had better hope that more companies don't follow the examples of Kraft and the Big Three auto makers. Otherwise, they could find themselves relegated to being technology vendors in a hotly contested market, which is a lot less attractive than being in the middle of a multibillion-dollar market.