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Technology Stocks : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: Bill Harmond who wrote (115164)	1/12/2001 2:00:12 PM
From: Danny	Read Replies (1) \| Respond to of 164684

Again, William, I am just speculating. But at this point, I can only speculate as I dont have enough concrete data to make a meaningful judgement. Please tell me why the following can't happen? Let's say company A charge 1M license fee for a 2 year contract, and at the moment A recognize revenue over the lifetime of the contract. Say in the latest quarter, A sold 10 licenses. It should report 10M / 8 = 1.25M in revenue for the quarter, and a backlog of 8.75M in the pipe. Then, at the conference, A told us that starting from the next quarter, it is going to recognize all revenue up front and it estimates to have 3M revenue for the quarter, much much higher than the 1.25M for the current quarter. So, do you think investors will like this announcement? Absolutely not! Because everyone can pretty much calculate that A is only going to sell 2 license in the coming quarter (2M + 1.25M deferred). Of course, I am using the extreme example here and any real company's revenue model (including ARBA's) is much more complicated than this. But whatever ARBA said last night, for investors like myself, it is not clear! And wall street hates uncertainty. I like ARBA as a company very much. But I am going to find out answers before I step in and buy here.