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Technology Stocks : INFOSEEK (GO) -- Ignore unavailable to you. Want to Upgrade?

To: cm who wrote (5893)	5/7/1998 3:39:00 PM
From: cm	Read Replies (1) \| Respond to of 9343

Five Years Ago... Warning: LONG POST... SKIP IF RUSHED. Five years ago, virtually NO WEB SITE, none, zilch, had a means of participating in transactions on OTHER web sites: in other words, revenue-sharing didn't exist. And should we think this is an insignificant little fact, calculate this: XCIT CEO projects that SOON for every $1 of traditional revenues from CPM-based banners there will be $3 of revenue-sharing revenues. And should we think this isn't relevant to SEEK's realities, there's this: SEEK currently has revenue sharing relationships with Microsoft Expedia and Realtor. com and several others. Five years ago, there wasn't a relative glut of e-commerce- specific software. There were, I think, MAYBE two product configurator engines... maybe two. Now there are considerably more. The POTENTIAL and more specifically REALITY of the Web as an unparalleled DIRECT MARKETING, COMMERCE, AND VALUE-CHAIN MANAGEMENT TOOL is nothing less than astounding. (Here's the world's safest prediction: many companies with just a tiny e-commerce engine are now testing the possibility of going ENTIRELY e-commerce: lowering transaction and ordering costs to 1/12 of where they stand with traditional call centers and human order entering; creating extraordinarily detailed clickstream analysis and customer profiling that (when coupled with predictive software) lend terrific precision to sales promotions and e-mail notification of new products, etc. This has caught MANY ANALYSTS by surprise. After all, just a couple of years ago there were articles claiming that the Web "is a toy in search of a business model." Or, "content maybe king, but profits are left begging." These claims have been proven HORRIBLY wrong. Not even close. And we sit here on the threshold of even greater growth. Huge European companies, like Beiersdorf (with cosmetic products and Curad bandages) haven't even begun the process of Web commerce investigation. Nestle has just started scratching the surface. On this side of the pond, using the Web value-chain management is just getting into vogue. And American Express, I am utterly convinced by their preliminary free e-mail offering, is going to move to electronic bill presentment and leveraging a very valuable "community." Now, how does this all effect SEEK? SEEK's server product helps Web sites like Tivoli's and others deliver sophisticated search capabilities. Larger sites--becoming more unmanageable and harder for a visitor to digest--need this product. And server product sales as percentage of revenue have doubled in a fairly short timeframe. SEEK is buying eyeballs and creating new "partnerships" which give them access to more visitors with specific interests and fitting into specific demographic categories. The Market values SEEK right now at, say, a bit over $30 a share, at least in part because it is PRIME PROPERTY with numerous visitors and more coming on line by the day: presenting greater opportunities for advertisers who pay the freight. The Market values SEEK right now at $30 plus (or $29 or $32) because it sees a strong senior management team guided by Motro and which now, presumably, includes the WBS President who has a very strong Mergers & Acquisitions background. The Market values SEEK at present levels at least in part because it OWNS (and would not sell) proprietary distributed search technology (which lesser lights at other search engines may say is becoming commoditized... from envy, I might add) and has Steve Kirsch, a search engine and programming wonk who is more than capable of coming up with new revs and new products. The Market values SEEK because it sees beyond the old models of valuation... and, frankly, is groping with how to get its arms around a very fluid situation. (The television network model may prove relevant... it certainly "fits" with what we know of this new mass medium.) The Market also values SEEK at today's price because it is gaining a strong presence overseas by virtue of the DT T/Online deal... complete details of which I have yet to see in print anywhere. The Market also has reached its judgment du jour because SEEK remains the SINGLE MOST ATTRACTIVE AND MAJOR ONLINE PROPERTY without a strategic alliance a la XCIT and others. And feels, does the Market, that there are proposals being floated in front Motro. And KNOWS that Motro is a strong negotiator... not willing to squander long-term advantages for short-term press releases. To which you can add: * More sub-$1000 PCs coming online... literally by the thousands each month. * More women getting on the Web--thus today's iVillage announcement adds value for advertisers. * And a SEEK spin-off which pushes business intelligence out for CNNfn and will soon push out more for other organizations... I suspect, international organizations. But, you know, the Market isn't all-wise and omniscent... it arrives at valuations that boggle the mind... and are proven to be very misleading. Or valuations that were the product of manipulation by unscrupulous sorts (Australian financiers, etc.) Or valuations that are "founded" on faddish developments: stocks as pet rocks. That's why I continue to research this stock, and ask those employees that I meet, evaluate the company's performance for my/our clients, review its product from the view of search functionality and fresh content... And, all said, continue to hold my LONG position and look to invest more on weakness. To date, I remain impressed. And continue to invest. Sorry for the long peroration, but sometimes even I look taking a fulsome look again at this stock... Best Regards, SEEKers, c m