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To: Doug West who wrote (9455)	4/8/1998 8:14:00 PM
From: Frank Z	Respond to of 27307

Excerpt from the following comment investor.msn.com Despite the blockbuster gains of Internet-related stocks in recent weeks and months, critics remain steadfast. David Simmons, Managing Director at Digital Video Investments, who has long argued that many names in the sector are wildly overvalued, said the performance of ETrade and CDNow Wednesday is another example of the folly. "It's all about market psychology. DMG downgraded ETrade for committing the unpardonable sin of coming in on target," Simmons said. "It demonstrates that what's powering these stocks in large measure is expectations they'll beat estimates. If they best estimates, everything will go bananas. If they come in on target, it's tanksville." Meanwhile, shares in companies like CDNow that are spending money on advertising are going up, he notes. "By that logic, Procter & Gamble should be the most expensive stock in the universe, not the least of which because they can afford [the advertising]," quipped Simmons, whose firm provides research to institutional clients and venture capitalists. "In just the last two weeks, CDNow announced they're spending $24 million, double what they spent all of last year. And the stock is going up? It's bizarre." Within the next three to five years -- which Simmons admits is "several lifetimes" in this market -- so-called Internet-related stocks, he believes, will be valued on par with competitors in their respective industries. That is, Amazon.com will be valued like a retail bookseller, CDNow like other music retailers, and E*Trade Group like a brokerage firm. Because they operate on the burgeoning Internet, these companies -- and others of their ilk -- currently trade a far higher multiples than competitors with more traditional modes of operation. "Eventually, I'm not sure when, these distinctions will go away as the Internet becomes more pervasive," he said. "In fact, they'll look as quaint as saying 'word-processing sector,?which was as hot in the 1970s as Internet is today."

To: Doug West who wrote (9455)	4/8/1998 8:24:00 PM
From: Michael Collings	Read Replies (2) \| Respond to of 27307

RD Buschman: Take a look at the balance sheet..... what do you make of it? Accrued expenses and current liabilities have risen over $5 million each of the last two quarters. Also looks like they've branch out of the money market and are trading some stocks. Deferred revenue is up to $10 million. I am assuming that is contracts signed but income will be realized when services are rendered, is that correct? But would especially like your insight on the $18 million in Accrued expenses. If it weren't for marketable securities being up $17.5 million then shareholder equity would be down 8.5 million.... maybe this is now a mutual fund instead of a money market stock......