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Technology Stocks : Internap Network Services Corporation -- Ignore unavailable to you. Want to Upgrade?

To: Guardian who wrote (289)	12/16/2000 8:46:35 PM
From: Carolyn	Respond to of 1011

December 15, 2000 - InterNAP Network Services (Nasdaq:INAP) is still years away from profitability, and its stock has been clobbered like most Net-related issues. But this is no dot-com washout, InterNAP could be a major force in the future of Internet infrastructure. InterNAP further distinguished itself on Thursday after the close when it issued revised financial guidance for a fully-funded business plan, including higher expected revenues of $220 million in 2001 with lower capital expenditures. InterNAP provides managed connectivity services that optimize the routing of data from one end of the Internet to the other. In short, its customers have mission-critical information that needs to get across the Net with greater reliability and speed than if they just rely on conventional Internet connections. The imperative for this service is driven by bottlenecks at the congested public network access points and private peering points. Most industry experts say the existing public network architecture is barely adequate for today's Internet usage, much less the broadband explosion just around the corner. There are several solutions to deal with the inadequacies of the current infrastructure. Companies like Qwest and Level 3 are putting more bandwidth in place for the long-haul networks. Then there are companies like Akamai that are managing the distribution of content at the edge of the network. These efforts are complimentary to InterNAP's solutions, which effectively give packets of data an intelligent map to guide it through congestion on the optimal route from start to finish. InterNAP buys bandwidth from several long-haul carriers so that its unique technology can choose among several different routes to find the most efficient route for data. The company's latest solution, ASsimilator 3.0, uses hundreds of millions of probes sent across the public Internet each day to provide real-time performance information on its network providers. InterNAP aggregates access to multiple backbones through its Private Network Access Points (P-NAPs). Between InterNAPs technology and the buildout of these P-NAP centers and other aggregation points, InterNAP is establishing a formidable barrier to competition in the market for high-speed connectivity with optimized routing. Like other infrastructure service provider business models, there is a hefty upfront cost but a large market opportunity and the promise of fat profit margins down the road. InterNAP held a conference call after the close on Thursday detailing revised financial guidance, and by revised we mean good. The company accelerated gross margin projections, reduced its EBITDA loss and capital expenditure projections, and increased revenue estimates. InterNAP also said that fourth quarter business is strong and the company will beat the Street consensus. These days its tough to ask investors to even look at any Internet-related company that is still several years away from profitability. But InterNAP is no flimsy dot-com story on the brink of disappearing, with revenues expected to jump from $70-$75 million this year to $220 million in 2001. And considering that the need for InterNAPs connectivity and optimized packet routing solutions appears to be approaching an inflection point, this seems like a fine time to get to know this company, especially with its stock price marked down to $14 7/8 from $111 earlier this year. --James Hale theonlineinvestor.com