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To: Norm Demers who wrote (119378)	3/21/2000 10:44:00 AM
From: Frost Byte	Read Replies (1) \| Respond to of 119973

ISLD - Weisel reiterates BUY 08:45am EST 21-Mar-00 Thomas Weisel Partners LLC * Digital Island shares have sold off over 20% since the Company priced its follow-on equity and convertible bond offerings on February 25, 2000. We believe this weakness is largely due to selling pressure from insider shares that became unrestricted following the offerings. * With the completion of the equity and convertible bond offerings, Digital Island raised roughly $740 million in cash. Based on our current burn rate and Digital Island's available cash balance, we assume the Company will look to raise additional funds in 2002. * We view the recent weakness as a buying opportunity as Digital Island, through its Sandpiper and Live-On-Line acquisitions, has put the pieces in place to create a compelling ebusiness solution. Furthermore, Digital Island has been extremely busy executing its business plan with several recent customer wins and strategic alliances. £ Digital Island has made several recent customer wins in the content delivery portion of its business, including contracts with The Wall Street Journal, Fingerhut, Careernext.com, and Tripwire. Digital Island has also made significant customer wins on a global basis with FT.com and ITV-F1 in the UK and Buzzcity and Careernext.com in Asia. With its recent acquisition of Live-On-Line, Digital Island is making an immediate impact on the Internet streaming market with several customer wins, including a recent announcement that 21 companies plan to use its streaming services including American Express, U.S. News & World Report and KennethCole. * Digital Island has also introduced its "TraceWare Everywhere" program in a partnership with Intraware, that provides Intraware's 185,000 IT professional customers with a trial offering of its "TraceWare" service. Additionally, Digital Island will support Apple's QuickTime technology in the 5,000 servers it plans to distribute across the globe over the next three years. * Following recent acquisitions, we believe Digital Island is uniquely positioned in the hosting/content delivery industry as the only pure play combined hosting and content distribution network with global reach. * With the pieces in place, executing on the power of its model is the next step for Digital Island. As highlighted above, Digital Island is making huge early strides in successful execution, which we believe will translate into strong financial results beginning in the second half of 2000. * On a market capitalization to revenue basis, Digital Island is trading at 31x projected 2001 revenue versus 130x for Akamai, its closest competitor and the 34x average hosting industry revenue multiple. Key Data: 1999 2000 2001 Price $70.06 EPS 52-Week Range: $156-$8 Q1 ($0.49) A ($0.65) A ($1.51) E Market Cap.(mn): $4,869.3 Q2 ($0.75) A ($1.43) E ($1.51) E Shares Out.(mn): 69.50 Q3 ($0.40) A ($1.35) E ($1.48) E Avg Daily Vol.: 1,340,390 Q4 ($0.62) A ($1.42) E ($1.43) E Fiscal Year End: Sept Year ($1.43) A ($5.14) E ($5.94) E Debt/Total Capital: 1% Revenues Price/ TTM Sales 391.71 Q1 $1.39 A $7.60 A $26.48 E Net Cash/ Share $0.53 Q2 $2.41 A $10.50 E $33.41 E Book Value/ Share: $14.82 Q3 $3.70 A $14.61 E $41.23 E Price/ Book Value 4.7x Q4 $4.94 A $20.20 E $49.00 E Secular Growth Rate: NM Year $12.43 A $52.91 E $150.12 E TEV/Sales 389.9x 91.6x 32.3x Company Description: Digital Island designed and operates the first global Internet protocol applications network dedicated to deploying mission-critical business applications and Internet content worldwide. Clients typically are multinational corporations who rely on the Internet to conduct business, but are constrained by the unreliability, slow performance and lack of scalability of the public Internet.Additional information is available upon request.