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

To: tony pan who wrote (772)	2/13/1998 10:45:00 PM
From: Vic A	Read Replies (4) \| Respond to of 4903

Some observations from many hours of looking into this very interesting stock. Still trying to determine long or short being best. It does seem from reading this thread that the basic argument of short vs. long really hinges on what type of company an individual sees Onsale as. Trying to project its future earnings/growth potential would seem to be directly related to how one would define its basic service/ product. Some deductions: 1. It is not a manufacturer 2. It is not "HSC" as that medium is very interactive and has a "Talk Show / Game Show" feel to it as well as the urgency pressure as time expires on the items. As well as being totally accessible to all non-techies and or computer literate persons. I would even propose that persons who shop on HSC are not the same persons who would purchase items through Onsale. Ask yourself as I have - A. Would you use Onsale (my answer as a business owner and computer literate user is YES) B. Have you ever used HSC (my answer is NO). Finally do you know of a person(s) who does frequent HSC and how many of those people do you see getting into eCommerce? 3. Some services and manufacturers have huge mass appeal and subscriber growth potential due to the inevitable massive growth of the web: ISP's - Browsers - Search engines - Software companies (Voice-Video) - Networking - even Retailers of "Brand Name - NEW products" that a typical lay person can feel comfortable with. Onsale is not any of these. 4. I am leaning towards ot falling into the "Swap Meet" area. On Swap Meets and Auctions: We have all been to them and they have some initial intrigue - but how many of us use them as a preferred method of commerce. I think that this is the "Fad" correlation that is being referred to in the thread - the interest is initial and it is INTRIGUING - but there is no real substance or continuing draw/need here. By viewing its web site vs. its press releases it seems that it is trying to do two contradictory things: 1. Press Releases= How well its used computer products are selling and the growth potential therein. 2. Web Site= Promoting heavily other services (which are not how it got this far) as if it really doesn't want to be seen as basically a "Used / Obsolete" computer components distributer. I think they know they are a Swap Meet and are desperatley trying to change before everyone else figures it out. But then are they going to be the same company that has got them this initial recognition (because it is only recognition/potential that is driving the stock. Note on "Auction" formats: Being associted with the automobile industry, I have seen the phenomenon of "Auction" popularity as some New and Used car dealers started using this format heavily. As a few original "Auctions" were sucessful (or seemingly so) many other Dealers started or converted to the format. However the growth "potential" was never even close to realized. "Auction" formats I think are successful in a Business to Business format. I think that Onsale will find some success and marginal growth through sales to Busineses and resalers. The real problem comes into play when looking at the growth potential with the general public. There are also numerous public liquidation auctions for vehicles / property / office equipment. These do have a following and do continue to operate and probably are profitable - BUT in a very small niche (and is mostly businesses and resalers who participate). Analogy= Swap Meets: They do exist - have a following - But will never replace the Major mass merchandisers and retailers where the public has chosen over many years to spend its money. Conclusion: Auctions have a place - just not a very large / lucrative one. On or off the Web.