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Technology Stocks : InfoSpace (INSP): Where GNET went! -- Ignore unavailable to you. Want to Upgrade?

To: levy who wrote (18591)	4/20/2000 10:55:00 AM
From: Pareto	Read Replies (1) \| Respond to of 28311

Inktomi vs. Gnet These companies are similar. The objective of both companies is use the scale of the internet to get into a phase of accelerating returns. You know that 99% of companies operate in an environment of deminishing return, if revenue goes up, margin goes down, to get an additional client gets more difficult. The internet has this unique feature that with some business models, an extra click does not generate more cost, but only extra revenue. But to reach this level, a company first needs to have a basic infrastructure in place. This is an investment of many millions, it requires years of knowledge accumulation and needs a global scale. Yahoo got to this level a year ago, then the shares shot up. Inktomi is reaching this level now. It has established itself as the market leader in their field (not yet in the field of the shopping engine). Their revenue went up from 36M to 47M from last to this quarter. Gnet will reach the point of critical mass in two quarters more. Then the recently hired people will be all productive. Now they have the burden of extra staff, without the revenue in the numbers. Instead of buying other companies and trying to integrate different technologies, they have used their cash to form an excellent team of professionals and are building a platform of netware focusing on the ability to scale. It is not always a good idea to buy other companies. You end up with a patchwork of technologies and company cultures. Yes you can invest in Yahoo and Inktomi, but their valuation already reflect their critical mass. It is frustrating to watch gnet hover in a trading range, but the reward will be larger if revenue starts to accelerate. That is when the quarterly growth as a percentage starts to grow. E.g. from 30 to 40% organic growth. Then we will fly, this maybe in one, two or three quarters. Who knows. Remember that there is a seasonal effect that in summer you Americans are using the net much less and revenue always dips, so i-net stocks dip when the October figures are published. In January it is always higher, after Christmas and because bonusses are paid and free cash is invested. I have the patience to wait a couple of months without complaining every day over lack of coverage. I just hope I can buy some more shares before it starts rising like Inktomi is doing the last months (didn't I mention Inkt to you in a PM several months ago?) Time will tell Regards Pareto patienceisamindset