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Technology Stocks : PROGRAMMER'S PARADISE (PROG) -- Ignore unavailable to you. Want to Upgrade?

To: Andrew G. who wrote (71)	1/10/1999 12:14:00 PM
From: Larry Brubaker	Read Replies (1) \| Respond to of 2383

Andrew, you want to talk, let's talk. First, I'm not sure why you are so concerned about the pparadise.com website not being up. The site says it is unavailable because it is being updated. Friday's PR says they plan on more than tripling the number of products offered via that website. Is the fact the website is currently unavailable supposed to be a big problem? Second, in regards to Digital River who I've never heard of, tell us why they are a threat to PROG? How much sales? What product? How fast are their sales growing? Are they earning a profit? Third, regarding online delivery, I noticed from PROG's website last Friday that some of their products are available via electronic delivery. What is the issue? Finally, I hope it doesn't gap up on Monday. I'd like to buy some more.

To: Andrew G. who wrote (71)	1/10/1999 12:21:00 PM
From: Zeev Hed	Read Replies (3) \| Respond to of 2383

Andrew, I think it would be quite useful to have comparative discussions with the situation at DRIV, and I will therefore start this discussion here. I just went to Edgar to pull DRIV last 10Q, and I am quite impressed with this company as well, yet, the current valuation of DRIV is right now $835 MM, and that is not taking into account warrants and option on 2.3 Mm shares. With those warrants and options, the number of shares outstanding would be 19 MM rather then 16.7 MM and thus capitalization will be $950 MM. The last quarterly sales where close to $6 MM ($5.758 MM), but that growth rate is slowing from a torrid pace exceeding 100% to now probably in the range of 60% and I do not know what will it will level off at. As of the end of September they had $28 MM in cash, but I believe that they raised another $35 MM in December (insider sold 1.25 MM and the company sold 1.75 MM at $23.5 but with expenses it is probably around $35 MM to the company). This injection of new funds surely provide the company a lot of money to support their development. Currently, however, to break even, they will need $31 MM in quarterly sales, since their gross margins are 16% and dropping, and their current overhead is $5 MM quarterly and growing rapidly. $31 MM break even per quarter is under the assumption that their overhead is not increasing. With a decelerating growth rate already, (first half about $5.8 MM, 3rd quarter about 5.8 MM indicates a growth rate going down from the torrid 1000% or so YOY to about 60% for the last QOQ, if anyone has last quarter results it would help nailing down this number). So DRIV is not expected to make any money soon (six quarters to profitability?), and may by then be the half the sales volume of PROG, yet they have currently a valuation which is 12.7 times that of PROG. (if indeed they get the the black ink promised land). On the flip side, PROG has not even started the channel of selling software via downloading electronically and once they get into this business their market presence through the additional marketing channels, should, in principle, give them a major advantage. Last, in the last quarter, DRIV has gone through about $6 MM of cash, If they continue their rate of expansion, as they stated in their 10Q they will be out of cash in 21 months. With the new injection of funds, however, they should be able to survive much longer. The critical point, however, is that at their current SG&A expenditures, they must get to $31 MM in sales per quarter, quite a task, IMHO. In summary, DRIV is an interesting speculation on perfect execution of a business model, PROG is at current prices, and up to $60/share (IMHO) a value investment. Beyond that, it will become more of a speculation on PROG's execution plans. Zeev

To: Andrew G. who wrote (71)	1/10/1999 2:38:00 PM
From: ria	Read Replies (1) \| Respond to of 2383

Andrew, I guess the website unavailability has caught on the attention of the members of this thread. With all the attention PROG is getting with the press releases on Friday it is a shame that they have to bring down the site to update the content. I wish they had atleast left a url pointing to a mirror site so that all the folks who are doing their DD this weekend could at least look at the old content. I not impressed with their upgrade process to say the least. A press release before tomorrow morning touting the updated website would help. In fact it might get them a mention on CNBC in light of the fact that the sock was up 40% on Friday. I am long PROG and hold no position in DRIV or any of PROG's other competitors. I feel they all have run up too fast and will correct severely in the next down turn. However, as I have stated in my earlier posts I do like DRIV's business model and strongly believe, as others have stated in their recent posts, in the future of ESD. The broadband connectivity will take care of itself in the coming years. In fact, my opinion is that a large number of PROG's customers (the developer community) are already connected to the net via broadband. I for one, use a T3 connection from work and and an ISDN from home to access the internet. I'd like to get the thread's feel for this. As I have stated in my earlier posts, building an alliance with one of the big boys will go a long ways to bring attention to this company. Long PROG. ria.

To: Andrew G. who wrote (71)	1/10/1999 3:37:00 PM
From: ria	Read Replies (1) \| Respond to of 2383

Now that their site is up I found the following under the Investor Relations/Company Profile link. In September 1996, Programmer's Paradise began to deliver software via the Internet from the Programmer's Paradise Websites, in conjunction with CyberSource Corporation, the leader in electronic sales and delivery of software via the Internet. This allows corporate and software developers to order and download technical tools and products in electronic format. In March 1998, Programmer's Paradise launched a new business-to-business e-commerce solution, ISP* eCOS (Electronic Commerce Ordering System). ISP* eCOS offers a comprehensive product database with multimedia capabilities designed to improve work-flows and efficiencies that can be accessed via any conventional browser, giving the actual end-user instant information on products, including price and availability. <a href=http://www.pparadise.com/Paradise/welcome.asp>Company Profile</a> I am haven't tried the ESD feature yet though I am feeling better knowing that they are moving towards it.