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To: Bill Harmond who wrote (36318)	1/24/1999 5:30:00 PM
From: Dell-icious	Read Replies (2) \| Respond to of 164684

Hmm. Is it possible that there are very few people who share your thoughts about the Internet Sector's fall being linked in any way to Brazil's devaluation or China's potential devaluation ? It's strange that the internet sector's rise during the asian crisis was attributed to their being impervious to the asian consumer's ups and downs. Don't tell me that you bought YHOO and AMZN late last year because you saw the global markets improving and you sold this year because of Brazil ! You bought them because they are great companies. Probably great long term holds and you sold because they had come too far too fast. Everyone else in the Internut sector had been thinking similarly and so it was overdue for a big correction. How all of this has any relevance to a China Devaluation or Brazil beats me. Care to explain ?

To: Bill Harmond who wrote (36318)	1/24/1999 7:41:00 PM
From: Glenn D. Rudolph	Respond to of 164684

The Internet Capitalist SG Cowen Internet Research 2 [Note to readers: Back issues of The Internet Capitalist can now be viewed - and printed out for friends and family - on SG Cowen's Web site at www.sgcowen.com/rs/rs5.html.] The Week And The Band Plays On Though we had planned to lead off this week's Internet Capitalist with the very good news of continued strength in Internet sector fundamentals in Q4 (the stock prices are another matter…), we're going with the @Home/Excite merger instead. As a contender for attention, broadband has now officially usurped e-commerce as the issue du jour, and we're happy to jump on the bandwagon here, since we think there are a few points that have been too readily glossed over as forward thinkers mull over the attractiveness of pipe dreams. The coverage that the @Home/Excite merger received surprised us in its similarity; “the biggest Internet deal”, “powerhouses”, “clash of the titans”, “AOL v @Home”, etc. Most of the debate bespoke of this all-or-nothing thinking and rested squarely on the assumption (conceit?) that broadband was right around the corner. Because this type of isomorphic thinking tends to create its own reality, it wasn't long before we were receiving calls about how much trouble Yahoo! and AOL were in because they lack a tangible broadband deal. As a rule of thumb, we're loathe to throw cold water around deals, especially when we believe so strongly in the intelligence of transaction itself, but we think some tempered reality should be equally digested when considering the effects of the transaction on consumers and on advertisers. The Deal Makes Lots Of Sense To Us… The elevator message on this merger is fairly simple, and is contained in management's repetition of the “media network for the next century” phrase; a marriage of @Home's pipes with Excite's content programming and advertising skills fills in both companies' weaknesses in offering consumers a one-stop solution (an approach that has benefited AOL tremendously). Excite's “pure media” approach (of owning a great reach -17mm users, of having great products and services -email, community, personalization, and of having strong advertising and direct marketing skills), when coupled with @Home's broadband pipes and MSO agreements (they “pass” 60mm homes), could produce one of the first real alternatives for consumers to the AOL service. Though this alone could eventually change the dynamics of competition for AOL's natural customers (the mass market consumer), we think it's wise to remember that AOL holds many cards as the broadband future unfolds (a case we make in more detail below). …But The Right Question Is “Who Will Have The Biggest Broadband Footprint?” Where Internet debates usually started and ended with the word “e-commerce” over the last several months, we suspect the debate will move squarely into the broadband corner, as investors (rightly) attempt to gauge how and where shareholder value will shift thanks to the emergence of broadband technologies. Within this context, we think the best question to ask is “Who will have the biggest broadband footprint?” We suggest investors keep a proper perspective when parsing the (very) many potential synergies between ATHM/XCIT and understand them within the larger context of what's taking place in the online market today. Broadband Will Be Important, But Is No Closer To Becoming A Mass Market Phenomenon Than It Was 72 Hours Ago…