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Technology Stocks : AUTOHOME, Inc -- Ignore unavailable to you. Want to Upgrade?

To: ahhaha who wrote (1321)	2/9/1998 11:19:00 AM
From: Roger Bass	Read Replies (2) \| Respond to of 29970

Fair comment. The signal-to-noise ratio makes rereading a fairly painful process, but I have looked at most of the relevant history. You clearly understand the company better than pretty much anyone else on this thread. I think your comment about the market pricing this company efficiently is unworthy of an experienced investor though. So it's worth it whatever the price is ? I don't think so. This kind of analysis seems to me useful at least in seeing what kind of future assumptions are discounted in the price. I have done some calculations based on what I've culled from this thread, and may post them later. More interesting perhaps are the two following issues which have not seen fully explored on this thread: 1. who will make the money from telephony over cable networks 2. @Work: how much of the business / web hosting pie could we get I'll make a few comments on (1) here, and leave (2) for another post. Telephony is interesting because it's clearly a business worth tens of billions (?) that the cable cos have been lusting after for ages. See this very old (1994), but still quite relevant interview with John Malone in Wired. wwww.wired.com As far as basic telephony goes, it's hard to see what would allow ATHM to capture any significant chunk of this revenue. However, if they put together a value-added phone service, this might be a compelling offer for the cable cos. I'm thinking of services such as the following: - voicemail/answerphone service - TV interface for an integrated email/voicemail message centre - videophone services ?? This all kind of begs the question of how long ATHM will be able to extract rent just from connecting third party services up to their high-bandwidth architecture, before it reverts to an internet-like interconnection model. Clearly, promotion on the @Home service is a more enduring source of leverage though. Regards, Roger. PS: I did buy in last week, so I suppose you could count me among the 'believers'.

To: ahhaha who wrote (1321)	2/9/1998 12:19:00 PM
From: Roger Bass	Read Replies (1) \| Respond to of 29970

Here are some observations on @Work for comment / contradiction by the thread. There was a discussion of this in posts #780-790. The @Work opportunity can be divided into three categories (not counting @Work Remote). 1. High speed net access (out) for businesses in the served area 2. Web site hosting - any business (access with dial-up ISP) 3. Connect to website/network hosted on customer premises The summary of the verbiage that follows is that there is an opportunity within the served area to get good penetration at some moderate multiple of the residential rate, though this may not be a large proportion of businesses. Outside that area the market is likely to be small, but high average revenue per customer, based on enabling access to @Home residential customers. (1) is clearly interesting for many businesses within the served area. The terms about only having one machine hooked up for @Home, not a LAN, and telco pricing for T1 and higher access speed should allow some premium pricing here, say a few hundred $ a month avg, varying with the size of business. Providing bandwidth oriented pricing for multiple connections could allow them to compete effectively with regular ISPs for price sensitive small businesses. The bigger issue though is: what proportion of businesses are actually passed by cable, given that cable was built out to serve residential areas? And even where businesses are passed, how many will use cable rather than ADSL or (more realistically) wireless ? Might ATHM, incidentally, have an opportunity providing backbone services to these other access providers ? (2) is the opportunity that was being described as huge before. I don't quite see it as a general web hosting competitor, at least in the short-medium term. The connection with the business itself is low-bandwidth dial-up, and asynchronous. If the site is being served to a general internet user they will not typically have a high bandwidth connection. @Work has no competitive advantage here, as performance depends primarily on the servers, not on the pipes. Other companies (including, but not limited to, ISPs) will deliver benefits focused on particular customer groups. However, if the site is aiming to serve specifically high-bandwidth content, to @Home users, or indeed to ADSL or others, then they have an advantage. The point is that this is not a big target market in the short to medium term. This implies that the web hosting service would initially focus on: - category (1) customers, where they just leverage that relationship and - hosting services with a streaming media content, with high and low bandwidth modes, depending on the customer (3), finally, is not different in terms of the service from (1), but is rather an additional benefit or reason to buy. High banwidth WAN service (eg employee remote access) seems like a more likely justification. I think it unlikely that many businesses will want to fully host a server themselves, though having real-time access to accounting systems for electronic-commerce could be a benefit. Here it's the low(ish) cost, always-on features that count though, not so much the huge bandwidth. Of course, applications could come along that change this (videophone call centres, anyone?)