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Technology Stocks : Net Perceptions, Inc. (NETP) -- Ignore unavailable to you. Want to Upgrade?

To: rupert1 who wrote (2529)	7/23/2000 7:58:21 AM
From: Carl R.	Read Replies (1) \| Respond to of 2908

No victor, that isn't really a flaw in my premise. All, or at least most companies IPO at an extremely high PE/PSR ratio that is not sustainable. Over time these ratios fall into line with the rest of the market, which is why IPOs almost always underperform the market. That means that either the company must grow into the ratio, or the share price must fall to bring the ratio into line. About the highest PSR you'll usually find for an company that's been around for awhile is a SEBL or a VTSS with a PSR as high as 10-15; most companies end up with a PSR between 1 and 7 depending on their growth rate and profit margin. When you see a company like a BVSN or an EPNY with a PSR up around 50-60 you have have to realize that they can't sustain 600% a year growth forever, and that eventually their PSR will come down to at least the 10-15 level, or more likely 3-8, which as I've said can happen by raising sales or lowering share price, or some combination of the two. NETP originally had a PSR that was much higher that the current level. In fact a year ago it was in the 50-100 range, too. It is true, of course the that the growth rate of NETP will not remain at 400%, but in the short run I expect it to remain quite high. Thus I can't imagine the PSR falling much much below 10 in the near term, and therefore I expect the share price to keep up with the top line growth. Thus if sales rise 300% over the next year, I expect the share price to do the same, so long as the company demonstrates that it can obtain a reasonable profit margin (but there is no reason to doubt this). Obviously e-tailers that grow but can never make money can not sustain a high PSR, while on the other hand a company like VTSS with a lower growth rate but a very high profit margin can sustain a much higher one because it's really earnings that matter in the end, not sales. You are correct of course that extraneous factors such as short term trading, share lockup expirations, rising interest rates, hype etc, can have short term influences on the share price as well. Thus the PSR could fall more short term, or it could rise back to 30 or 50 at any time. Long term though, the share price will track the growth. One of the problems with hype is that the short term gains it produces are not sustainable, and thus it just serves to create the need for more hype in the future, or it creates additional volatility which brings traders instead of investors. In the end the stock price will go where it will go, and where it will go is dependent on the performance of the company. If you question whether the stock can track sale growth over the long term I have to wonder if you've ever held a stock long term like an INTC, a MSFT, or an ORCL. Thus I favor all possible PR that is targeted towards generating new business, because that type of PR will bring sustainable increases in share price, but I don't encourage the temporary gains that could come from hype even though it could bring me additional trading profit. After all, why should the company try to benefit traders? They shouldn't, they should try to benefit long term investors. Carl

To: rupert1 who wrote (2529)	7/23/2000 1:15:36 PM
From: Carl R.	Read Replies (1) \| Respond to of 2908

Can NETP's software be used for this, too? Hiwire Unveils Targeted Ad Network for Streaming Media By Pamela Parker Advertising firm Hiwire Inc. on Tuesday launched a beta test of its ad insertion network for streaming media, a system which allows for the targeting of ads based on demographic data about the viewer or listener. RealNetworks (NASDAQ:RNWK) has built a platform for targeting ads on its platform, in conjunction with Engage, (NASDAQ:ENGA) DoubleClick (NASDAQ:DCLK) and Real Media. Engage also has developed a way to target ads in Microsoft's (NASDAQ:MSFT) Windows Media Player. "Broadcasters are now able to recoup their streaming costs and generate premium revenue from their online listeners. The ability to directly target listeners in a live stream is an industry milestone -- and just the beginning for Hiwire," said Warren Schlichting, chief executive officer of Hiwire. "What we are offering netcasters is a continuous revenue solution that will eventually work on all platforms and with both audio and video." Currently, the Hiwire technology works with Windows Media and the company says it will soon work with Real and Quicktime formats. Hiwire is a private firm whose investors include Grey Advertising's venture arm, Grey Ventures. And this: Akamai, Engage Aim at Anonymous Profiling By the InternetNews.com Staff Internet marketer Engage Inc. and Akamai Technologies Inc., a streaming media provider, Monday announced they will unite to deliver on-line content, starting with advertisements and marketing campaigns. Under the agreement, Engage (NASDAQ:ENG) will purchase Akamai (NASDAQ:AKAM) content delivery services built upon the EdgeAdvantage platform and use them to deliver rich media ads for Engage's on-line media network properties to help marketers identify and target their audiences. These profiles are based strictly on users'on-line browsing habits and interests and contain no personally identifiable information, such as names, addresses or e-mail addresses. The partners plan to introduce specialized services for targeted ad insertion in streaming media. Content providers will be able to take advantage of Akamai's delivery network and stream assembly technology along with Engage's advertising management solutions, which incorporate targeted anonymous profiling. Additionally, the companies plan to co-develop applications for anonymous personalization. "We see this deal as two online businesses coming together to provide customers with solutions that will help improve visitor acquisition and retention through the use of targeted content and high-performance delivery," said George Conrades, chairman and chief executive officer, Akamai. Akamai and Engage are both members of the ICAP Forum and plan to use the Internet Content Adaption Protocol (ICAP) in their collaboration. ICAP will be submitted to the Internet Engineering Task Force (IETF) Web Replication and Caching (WREC) working group as an Internet draft at the next WREC meeting.