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To: Thomas Mercer-Hursh who wrote (45945)	8/29/2001 10:56:53 AM
From: Art Bechhoefer	Respond to of 54805

Thomas, yes, book value in itself is a conservative measure that often does not include the value of IP developed internally. In those cases, the cost of developing the IP is recorded, but the added value or potential for creating value does not appear on the books. Ironically, if a company acquires another company with IP, the value of the acquired IP may be included in the good will. But the reason that change in book value per share is still a good measurement for companies with lots of unreported value from IP is that if the IP is worth anything, it will show up in the extra profits that accrue. Thus, the key is not book value alone but CHANGE in book value over time. Art