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To: Martin Rasch who wrote (21779)3/30/2000 12:46:00 PM
From: Martin Rasch  Respond to of 54805
 
WGAT Business Model

I asked my questions (parts of them) directly to the company as well. Just received an answer:

Dear Mr. Rasch:

For the answers to your questions, I would like to refer you to our S-1 filing (with the Securities and Exchange Commission), which is available through freeedgar.com or our web site wgate.com. On our web site, you should click on the stock quote section of our home page (upper right under our logo). Once you are on the stock quote page, on the blue bar across the top, click SEC filings and choose S-1A 10/8/99. This will give you a full explanation of the company and its business.

We will also be filing our annual report on Form 10-K with the SEC today and it should be available on the Internet in the next day or two. This will have all of our year-end 1999 financial information and an update on the company.

To answer your questions briefly, almost all of our revenues currently come from sales of hardware and software to cable operators. We also receive a portion of the monthly fees from subscribers to the service. In the future, we expect to receive a portion of the revenues from Channel HyperLinking (ads, as you call it). We will be sharing the "ad revenue" with the cable operator.

It costs the cable operator approximately $30-40 per WorldGate subscriber for equipment.

For its service, WorldGate uses mainly "off-the-shelf" equipment, which it modifies. We are not really a manufacturer.

If you have further questions, you may e-mail me directly.

Chris Van Horne
Investor Relations
WorldGate Communications, Inc.


Martin