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 : USWeb (USWB) -- Ignore unavailable to you. Want to Upgrade?

To: Cub Trader who wrote (647)	10/26/1998 12:07:00 PM
From: 4-UR-Eyes-Only	Respond to of 1188

I heard about the noise about a possible alliance / buyout between USWB and EDS or Anderson Consulting. Has anybody else heard about this?

To: Cub Trader who wrote (647)	10/30/1998 1:49:00 PM
From: Rick	Read Replies (1) \| Respond to of 1188

Cub Trader - Sorry that I can't make you feel good with my perspective on US Web. It's natural when you stake out a strong position on an issue that those on the other side will not warm up to you. I can handle that. Anyway, I continue to think it's overvalued. The latest data points that are of concern: - Labor and benefits costs are surging based on recent labor department data - Slowdowns in ERP and custom development spending driving the other IT consultants more rapidly to Web opportunities. More competition and lower fees for everybody - In general margins for the industry do not look great. REGI just reported disappointing numbers - they have margins of about 5% and trade at just 1 times sales US Web has always traded on hype, particularly internet hype. There are so many fools out there with money trying to get rich on the latest story stock, that have no understanding of how to value a business ! Once the story intersects with a little reality, the bubble valuation evaporates. This has already happened to US Web. US Web has always been a T&M consultancy that wanted to be valued like an internet business. If you look at the Yahoo board (one of the best contrarian indicators in the land, densely populated with fools), the posters are always referencing Yahoo or Amazon or companies that have a web model as relevant to the valuation of US Web. But the fact is, the model is akin to CATP or REGI, not YHOO or AMZN. Just because it makes sense for bona fide internet business model companies like AMZN or YHOO to concentrate on market share at the expense of the bottom line, does not mean a consultancy which helps build the web sites should strive to make losses. One Man's Opinion. JBD. P.S. The key buy signal that I am waiting for: when CEO Firmage shaves his beard. This will be the signal that he is coming clean with the disguise and wishes to live an honest life. (Of course, I am joking)