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Technology Stocks : RRRR: Rare Medium Group (soon to be) formerly ICC -- Ignore unavailable to you. Want to Upgrade?

To: chalu2 who wrote (68)	1/16/1999 1:01:00 PM
From: Mahatmabenfoo	Respond to of 1150

> I must disagree with you about HRB. In essence, > they are a fee for service company Fair enough, although at least part of its business is NOT fee-for-service: <<HRB also engages in the origination, purchase, servicing, securitization and sale of nonconforming mortgage loans.>> I don't know if the non-fee part is what may make HRB attractive as a public company, or even if it is attractive. > your hypothesis (as I understand it) is that > such a company cannot be wildly successful. Yes -- with the added thought that RRRR's plan to buy many local website developers (with the money it raises publicly) isn't so great unless (how does that old expression go?) the sum of the parts is greater than the whole. RRRR sounds sexy because it is connected with "advertising" and "internet", but I'm not so sure it is any different that a series of gas stations in different cities organizing to go public. Each is a bunch of local businesses with serious limits on what they can earn. Actually RRRR makes a much WORSE case for a public company that a bunch of gas stations, because market entry is easier (anybody with a computer can call themselves a website designer, so competition on price is tough), and because RRRR's strength is in its creative employees (who can leave faster than you can move a gas station), and because a bunch of gas stations have synergy (they can bargain as a group for cheaper gas; RRRR has no obvious similar economies of scale). Speaking of market barriers being low, existing advertising agencies are creating in-house website developers. Others use outside developers, but eventually will buy them or create their own inhouse departments. Where does that leave RRRR? - Hoping to get bought out, or will advertising agencies instead buy out RRRR's non-public competitors? - Or does RRRR think it can grow into a real advertising company? - Or will RRRR stay website only, and eventually take as clients only small companies, because bigger richer ones will eventually have their sites managed by the advertising agencies they usually use? None of those possibilities make RRRR a compelling story. > pick for what RRRR could be like when it > grows up: TNO (True North). This is a very large > advertising company with a market cap Well, maybe: TNO does buy other advertising companies which is maybe like RRRR buying other WWW developers. But TNO at least has a story about how the sum of the parts is greater. From TNO's "President's Letter": <<To capitalize on those trends, we developed a strategy with two key priorities: 1. to hold more than one global agency brand and 2. to use technology to create leverageable advantages for our clients.>> #1 I understand: with advertising is going global, and ads that work in the US need to be recast in Europe. So TNO buys European advertising agencies, and in that way can promise one-stop shopping. This strategy so far has no equivalent in the WWW world. Companies tend to hire website developers wherever they are (for instance, DELL in Austin amongst others uses a company in NYC). I don't understand #2, but I recognize it as part of the hype needed for public companies: "leverageable" is the key word. Synergy. More than the sum of its parts. A PLAN. RRRR may also have a plan, but no one here seems to know it. - Charles