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

To: Eddie Kim who wrote (33094)	9/18/1998 9:14:00 AM
From: .com	Read Replies (1) \| Respond to of 97611

Eddie, I agree with much of what you say. The value of Lycos and Yahoo are not based on the abilities of their search engines. Instead, they have positioned themselves as media companies. Eyeballs, advertisements and E-commerce partnerships--that's what it will take for AV to become a valuable asset. According to a recent report (http://fnews.yahoo.com/isdex/98/09/17/morning_980917.html), AV is not among the 20 most visited web sites or the top utilized search engines (which are Yahoo, Lycos, Excite and Infoseek). In addition, they are not really into the advertisement and e-commerce game (atleast at the level of Lycos and Yahoo). This will have to change immediately if AV is to become a real valuable operaion for them. Then, AV can spin off CPQ! Personally, I really like Lycos's approach to this game. They are extremely aggressive, they know where the money is, and the have very lofty expectations.

To: Eddie Kim who wrote (33094)	9/18/1998 2:19:00 PM
From: Sofa Kingdom	Read Replies (3) \| Respond to of 97611

I think you're missing a valuable element here. Compaq is a hardware company. In the past they have done some interesting things with software loading routines and insight manager (SNMP management), but they are still primarily into hardware and engineering of same. AV and the other search sites are all the rage right now, but isn't this a fair departure from CPQ's core business? I've been buying Compaq equipment for my employers for years and watched the company go from a one-trick-pony PC manufacturer to the verge of being a major player in the hardware market. I've never known them to be long on software skills (i.e. they still use Phar-lap code in their load routines), which means they would have to buy these skills. They could spend a lot of time and money 'learning' this business (or getting hammered by more experienced players). Near term it looks inviting, but they could just as easily use AV to parlay relationships with other companies (e.g. Pointcast or Oracle...). Hasn't the original development team for AV already flown the coop? If they don't overextend to develop this technology they could keep it as a tidy side interest or spin it off to fend for itself later. Hopefully, they will handle it better than Novell handled Wordperfect. I think the news on Tandem and DEC is where the read excitement lies. This is right in CPQ's sweet spot. CPQ has the raw materials to create a new server platform based on Alpha. NT was partially developed on the Alpha so you know the clean port of this code isn't years away. This means they have more cards to play than Dell and the others who can't sidestep Intel. They can leverage their service base with DEC and develop big iron with a proven OS in short time. With the Tandem underpinnings they could easily attack the AS/400 market or the banking market(NCR). If they can get NT and maybe Novell 5.0 on Alpha I think they have the makings of a big player. That's why I'm in CPQ, not AV. If they follow a strategy like this it won't develop in the next few quarters. This means it probably won't interest the day traders until something actually surfaces and the stock starts to move. I do anticipate that companies will be making fill order purchases of PC's before Y2K. This will probably make the stock jump a little when supplies get low and demand forces the prices up as the fateful day approaches. I'm not down on AV. I just don't see as much potential there. It could cost CPQ a lot to get driven from a market that is already loaded and moving fast. I see AV as more of some good support in an off suit rather than a trump card. If you know something different I'd love to hear about it.

To: Eddie Kim who wrote (33094)	9/18/1998 11:39:00 PM
From: Merlo	Respond to of 97611

Compaq is a good value play, according to Schmidt. The firm now sells at one-third the price of Dell, one-fourth the price of IBM, and one-sixth the price of Yahoo. Schmidt reasons that among these Compaq would be the stock of choice during a market correction as its stock would decline the least. And when the market picks up again, Compaq would have the greatest growth potential as it holds the most resources at the lowest price. "Compaq is still relatively cheap and should be purchased up to $50," Schmidt says. "At this point, the plan is to continue to accumulate Compaq on the dips." (More info on who this person is as you requested).