Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Bill Wexler's Profits of DOOM -- Ignore unavailable to you. Want to Upgrade?

To: Cosmo Kramer who wrote (57)	2/23/1998 3:22:00 PM
From: Larry McColloch	Read Replies (1) \| Respond to of 4634

Rumor I heard was that 3com closed a deal with TCI to supply cable modems. Larry McColloch

To: Cosmo Kramer who wrote (57)	2/23/1998 3:27:00 PM
From: Cosmo Kramer	Respond to of 4634

ATHM up over 3 today! Morning Report Mon Feb 23 eMailbag: Who Wins Cable Internet? @Home Vs. AOL By Steve Harmon Senior Investment Analyst Internet.com "Where Wall Street Meets The Web" First reader up this week: "Steve, I think the idea of Internet through cable is a fantastic idea. Just include it in the monthly fee. If you want Internet and a telephone, too, you need 2 lines, and 2 numbers and doesn't the phone company love that." Reply: Our analysis of upgrade costs for cable Internet shows that it may cost a minimum of $250 per subscriber, with a cable head end serving just a few thousand people costing $500,000 to $1 million to upgrade for two-way services. Costs are coming down, however, and the cable companies begin to look for the alliances necessary to make it happen. Microsoft's $1 billion investment in Comcast was a sign of good faith (or hedging its bets). Which firms may be poised to win here? Despite its early languishing in sign ups we believe @Home (NASDAQ:ATHM - news) has the breadth of offering between access and content that could vault it into the cable Internet space. Time Warner's (NYSE:TWX - news) RoadRunner also shows promise. But from an investment perspective we think TWX is simply too big to invest in just for its cable Internet angle. Today anyway. Spin out the wired assets and let Wall Street decide. Other beneficiaries of cable Internet (which requires a set top box): Sun (NASDAQ:SUNW - news) and Microsoft (NASDAQ:MSFT - news) both which inked deals with the world's largest cable operator, TCI (NASDAQ:TCOMA - news) to supply the software guts of the service. Hardware side, General Instrument (NYSE:GIC - news) , if it can deliver the boxes on time. Net net I think it'll take about five years for the necessary ingredients (capital, technology, sellthrough) to come together here. If they do @Home could be bigger than AOL (NYSE:AOL - news) . If so, why doesn't AOL buy now? Metric System Nods "Steve, thanks for the measuring tools (ISR, Feb. 19). Particularly the value per page view. My conclusion is that all of these stocks are highly overvalued with current ad rates running at about $20 CPM. eCommerce will generate a huge chunk of the future revenues in this area." Reply: Overvalued in relation to ad revenue but perhaps not the commerce potential. The challenge is that most Web firms' business plans are all "on the fly" as they go from traffic to ads to marketing to commerce to a fusion of all of these. So staying in tune with the marketplace and where it's going is crucial. What's the value of a page view for someone that buys $1,000 PC off of it vs. one that merely shows a news article? That's why we believe ONSALE (NASDAQ:ONSL - news) as a good example of loading pages for value. Yes, there's much it could do but ... we'll save that for an upcoming look at ONSL and the Web auction space. Clicked "Double Click is taking a big ride right out of the box. Do you have any info on them? How different are they than CKSG?" Reply: DoubleClick went public Friday at $17 per share and surged more than 70%, an indication of how much investors appreciate an Internet ad pioneer. We analyzed DoubleClick (NASDAQ:DCLK - news) back in ISR Dec. 17, 1997, before the latest slew of analysts had it on the radar even. We looked at CKS in ISR Nov. 11, 1997, the day its shares plunged. To update you, from our perspective DoubleClick represents a much more Internet-centric way of doing business than CKS, which has non-Internet aspects to it. DoubleClick was borne of the Internet, its way of managing ads across many Web sites is purely an Internet opportunity. CKS focuses on marketing communications. Yippee "Dear Mr. Harmon. Yahoo! I am really Excite(d) about your analysis (ISR, Feb. 19). The stock price of YAHOO (Price/Sales ratio of about 70!, no earnings, defies my imagination. Seeing on your table how much overvalued it is even compared with the other ones, makes me feel good (I am short Yahoo!). Thanks for a job well done." Reply: After all is said and done revenue and earnings are what matter. The rest of it --traffic, page views, eyeballs, user count--is noise. Unless those elements can be harnessed into a commerce-content machine. That's the challenge. Yes Yahoo has done a better job at branding than anyone else (even Netscape in some ways). But this is a long race and sprinters must prove they can go the distance also. Blip us with an e-mail to stocktalk@iworld.com on what you think about any Internet stock or investment you've seen or heard about to. Send us your rants, raves or ramblings and they may be included in this column in a special feedback edition every week. Throughout the trading day be sure to check Internet Stock Report's index of leading Web companies, the ISDEX, Internet Stock Index, for a roundup of how Internet stocks fare minute to minute.