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To: H James Morris who wrote (30575)	12/20/1998 4:53:00 PM
From: Bill Harmond	Respond to of 164684

>>I'm going down to the beach and drink beer. Better bring firewood. Otherwise it's too cold for the beach today. I grew up in Coronado. You're not that close to the tropics!

To: H James Morris who wrote (30575)	12/20/1998 9:41:00 PM
From: Glenn D. Rudolph	Respond to of 164684

The Internet Capitalist SG Cowen Internet Research 10 at this point, but there seem to be a few observations worth making, including the relative impact that increased online shopping could have on certain properties. Will suburban malls feel the pinch more than urban-based retailing properties? Probably, since an upscale demographic has the most incentive and has shown the most proclivity to shop online. As an investment banking aside to this thought, we predict a time in the not-too-distant future when, like physical real estate, virtual real estate will be able to be securitized (that is, the cash flow from a property packaged and sold to investors). Some enterprising, aggressive young investment banker (and, for that matter CFO) should be thinking today about the possibility of packaging, say, the advertising, slotting, and placement fees associated with, say AOL's finance channel. Once a stable data set can be shown that AOL's Finance channel generates $x per quarter, per page view, per “inch” of screen space (per whatever), we can't help but think that there wouldn't be a customer out there willing to purchase that revenue stream, for some expected return on their investment. We'll continue to ruminate about the possibilities (and hope that we get a call from AOL's CFO, Mike Kelly), but if you've got a better extension of this idea, we'd love to hear it. Value Chain Re-org Aside: News that Times Mirror, the owner of the Los Angeles Times, was cutting back about 500 workers before the end of the year at The Times (this follows another previously announced round of cuts last month) got us to thinking again about the Internet's impact on the newspaper companies and how exposed they are to losing a major portion of their profitability (classified advertising) to the Internet players. Though the reductions are spread throughout the organization, we can't help but think that this may not be the last attempt at the Times to re-align a cost structure that cannot be supported by the dynamics of the newspaper business in the Internet age. The company's own press release hints at such a possibility: "We must also reorganize ourselves at The Times to meet the huge challenges we face as a company and a newspaper in the competition for readership and advertising. Our long-term health depends on growth, and we must have the organization in place to ensure that we succeed….national and classified ad revenues are not growing at the rates we anticipated. As a result, we have a substantial third-quarter operating profit decline compared to last year. We are evaluating everything we currently do to determine what is no longer essential to our future growth and to determine where we can be more cost effective." @Home Buys Narrative @Home announced that it has agreed to purchase Narrative Communications, a private, Waltham, MA-based Internet advertising solutions provider that creates advertising with animation and other slick features, for about $90 million in stock. @Home, it is reported, is principally interested in Narrative to create ads for the new generation of digital set-top boxes being distributed by cable companies; given Narrative's experience with rich media; the company has a product called “Enliven” that essentially is far more interactive than simple GIF-based banner advertising. Amazon.com is a Narrative customer, for example, and uses Enliven to allow users to print excerpts from best-selling books. We have long held the belief that Internet advertising buys will be based on a two-axis approach from the marketer's perspective; that reach is critical, but that depth (and