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Strategies & Market Trends : Three Amigos Stock Thread -- Ignore unavailable to you. Want to Upgrade?

To: simarx who wrote (11057)	12/6/1998 11:53:00 PM
From: M.R. Davis	Respond to of 29382

(vairagya is my handle on Yahoo) I'm interested that Mastrini said that (prepared to take on 500 agents for the website). Firstly agents will not be designated for the website or for phones - they will have both systems on their desks and answer phones or web requests as needed. Secondly, it's very out of charachter for IFLY to propose such rapid (read expensive) expansion. They have done a beautiful job of expanding while containing costs. Nowhere is this more evident than in the costs associated with the website ($350,000) - sure, they could have thrown money at it and had it fixed quicker. But they prefer to contain costs.... why? Because then they can show increasing net revenue, quarter on quarter growth for a small start-up company is extremely impressive. The problem is that we are constantly evaluating them as an Internet company whereas IFLY management evaluates itself as a ticketing company. Therefore they have focused on what analysts and serious investors consider most carefully - the ability of the company to grow sales while containing costs and achieve quarter on quarter net revenue growth. If IFLY did take on 500 more agents - it will be in response to built up demand, I don't see them loading up on agents as a strategic move combined with a big marketing campaign - too risky. 500 agents would add something like $8 million a quarter (or more) to their costs. They won't add those agents until the customers are lined up - and they won't be doing huge campaigns to line customers up.... slow and steady. And - who knows they might be at 500 more agents in 8 months time, but it will be in response to customers calling at their door through word of mouth and relatively low key, but ubiquitous,(inexpensive) marketing. And watch those profits rapidly rise! [And when the froth of the internet investment frenzy has blown away IFLY will be standing head and shoulders above the rest]