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 : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: Bill Harmond who wrote (22778)	10/24/1998 6:34:00 PM
From: Glenn D. Rudolph	Respond to of 164685

The Internet Capitalist SG Cowen Internet Research 7 metrics, usage and utility. And in order to be truly helpful to the Street, this “depth” measure would have to be common among advertising-based business models and, importantly, validated by a third party. Yahoo! has recently indicated that they are working with a third party measurement player to address this need, suggesting that a measure may be forthcoming. So while we await some industry consensus on what measure is acceptable to measure influence, how that metric would be measured, and who will be doing the measuring, we anticipate further confusion on Internet investors' part as they attempt to measure influence and the resulting financial rewards that will flow to those portal companies with the most. This confusion should play out over the next few quarters, but already we've got some leading indicators (in the form of market capitalizations) as to which companies the Street believes have influence, and which are trying to establish it. As the process of measuring this metric unfolds, we'll continue to wrestle with reach and traffic figures, looking for a metric that, though lagging, helps us understand the relative valuations between these companies. Company Watch America Online (AOL) Thursday's WSJ article on the threat to AOL from broadband services contained all the elements of distracted journalism, including a threatened incumbent (AOL), an advancing Goliath (AT&T), a hopeful upstart (@Home), and an assumption that all those players but one (AOL), would seize the opportunity presented by broadband technologies. It did not, unfortunately, contain much in the way of insight, since the broadband issue has been kicked around Silicon Valley more than impeachment scenarios around the Beltway. Though the response to this line of thinking (that broadband changes the game and that AOL may be unable to respond to the changes wrought) cannot easily fit within this edition of The Capitalist (we'll save it for another issue), we'll make the observation that speed is only important if there's something on the other end of the pipe worth seeing and if there is someone there to see it. AOL's strength derives primarily from the 15 million consumers worldwide that call AOL their online home. Will they, willy-nilly, pick up and leave once their cable company offers them fast service? Clearly, no. Will AOL be able to leverage their subscriber base with providers of broadband services or content? Clearly, yes. AOL most certainly will not be left out of the broadband game; indeed, it is our firm belief that they'll be driving it. Yahoo! (YHOO) This week, Yahoo!'s Yahoo! Finance area set a policy that requires all new participants to supply a valid email address before posting messages. Apparently, a few participants were abusing the environment and causing a disruption (no examples were given, but perhaps there was a lot of cursing when Yahoo!'s stock failed to go up after their blow-out quarter). This got us to thinking that, as Yahoo! has expanded their community and chat functionality over the last several quarters, they have necessarily created the burden of passively managing the environment they've fostered. As portals become more central to online users, the demand for them to police their community should only increase. If this function can only be performed by a monitor (employee), could this impact profitability? That's unclear. For now, the margin structure should be driven by far more important things (like S&M expenses), but it's food for thought. Amazon (AMZN)