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Non-Tech : E*Trade (NYSE:ET) -- Ignore unavailable to you. Want to Upgrade?

To: ecommerceman who wrote (4578)	1/30/1999 3:20:00 PM
From: ecommerceman	Read Replies (1) \| Respond to of 13953

I thought this analysis from Gomez Inc. was interesting, and worth considering for folks like us, even though E*Trade is not an "internet company," strictly speaking. How To Evaluate Internet Companies January 27, 1999 by: John Robb Today's crop of Internet companies all enjoy high valuations. However, in time, investors will find that the mere announcement of an Internet strategy or a dot com at the end of a company's name is not enough to sustain high valuations. Here are the new rules of thumb to use when evaluating Internet companies. Look for: Traffic. Lots of it with a rapid growth rate. (example: GeoCities) Brand awareness. A strong and trusted brand that is recognized by Internet users. Why? In a confused and chaotic marketplace, branded companies have an advantage. (example: Yahoo, ranked #1 in our survey of the Internet's most trusted brands) Vision. A strong sense of what it takes to make money in this medium, and a demonstrated ability to do it. Also, a large potential market for the company's services. (example: Amazon.com) Companies that will have a difficult time after the current market froth settles: Software companies. The Internet software model is broken, thanks to Microsoft, Netscape, Apache, and Linux. Software is now often a loss leader. We are not in Silicon Valley anymore, Toto. Consulting companies and Web agencies. People intensive business ventures like consulting and advertising grow slooowly. Too slow to get Internet valuations. Dependent services. Beware firms that are overly dependent on traffic deals or strategic agreements to generate revenues. Without that traffic or agreement -- poof!