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.

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

To: Sea Otter who wrote (3779)	9/23/1998 10:44:00 AM
From: Drew Freeman	Read Replies (3) \| Respond to of 10081

Hi All; Just a coupla thoughts regarding GMGC and the ad campaign: - Sea Otter's assertion: GMGC is getting more aggressive with advertising because they want to get their 'bang for the buck' early, before a larger partnering announcement potentially overshadows their own proprietary message. - John's assertion: GMGC is nervous because they see competition entering their market space and reseller signups are not going fast enough. - My theory is sort of a combo of these two assertions. I believe that a large partnering announcement is inevitable and I believe reseller sales are sluggish relative to the overall explosion of the unified messaging market. I think GMGC is trying to pump up the Portico name ASAP in order to do two things. I think they want to give their resellers a fighting chance to compete against a partner-led Portico sales charge into a hyper-growth market as well as trying to maximize brand equity so that a partner / suitor will need to pay top dollar. It makes sense to me that GMGC is worried that if the resellers don't gain momentum really soon that channel conflict caused by a deal with a partner / partners wielding huge marketing and distribution clout and more competitive pricing will bury them. This may be a wild-assed guess, but it makes sense to me. Do you want to be Joe's Cellular in Omaha trying to compete against a Baby Bell or a Web Portal or a name like Motorola? Next, I believe a partnering announcement is inevitable. The unified messaging market is poised for hypergrowth and EVERYONE wants to get a piece of it. There are very few viable technology providers out there with real-world, functioning unified messaging solutions. When Telco's, Web portals, and Equipment Manufacturers do their 'make vs. buy' analysis, and they realize how complex the technology is, many of them will choose 'buy'. GMGC is at the top of the short list. Second, I fear for the resellers unless they can gain major momentum really soon. First, using the 80/20 rule, my guess is that 20% of the 50 or so resellers are doing pretty well and making most of the money for the service. This equals approximately 10 resellers. Let's say they each have done great, and will have signed up 500 customers each by quarter's end. That's 5,000 subscribers. That's pretty good, until you consider the market-size somebody like a Telco is going to have to reach to make a deal worthwhile to them. With GMGC supplying through partners as well as resellers, can you say channel conflict? GMGC's initial marketing strategy was to build out the Portico service through resellers. This reseller strategy made sense when GMGC thought they had to build the market themselves from the ground up, but I don't think that strategy makes sense now. Unified messaging is poised for hyper-growth and needs no help from GMGC to come alive. In my opinion, GMGC doesn't need to worry about building the market, it needs to worry about keeping up with it. Cheers all; Drew