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Technology Stocks : Preview Travel (PTVL) ---- Via...Excite & AOL -- Ignore unavailable to you. Want to Upgrade?

To: CanynGirl who wrote (485)	2/2/1999 8:53:00 AM
From: CanynGirl	Read Replies (1) \| Respond to of 728

From Briefing.com: NationsBanc Montgomery Securities Technology Conference Preview Travel (PTVL) Strategic direction: Vertical Travel Portal, meaning "Virtual Travel Agent" selling product, not transactions. Will use broadband technology to build content and community, which leads to booking Service is critical factor to success: will use technology to provide higher level of service Average customer goes through following steps to purchase a vacation: Planning/Shopping/Buying/Confirm/Waiting/Leave Preview Travel will build a web section to accommodate each portion of a vacation purchase Will store history of users transactions to market new product to them Comparison Slide of Preview versus competitors, with analogy to online firms in 1994: Preview compared to AOL in 94: Service and consumer oriented Expedia compared to Prodigy: Technology focused Travelocity compared to Compuserve: Legacy system, business-to-business focused Total registered users: 6.4 million (9-10K daily) 454,000 total buyers, about 225,000 one-time buyers, 52% are repeat buyers Ratio of buyers to visitors is increasing, from 6.5% a year ago to 7.1% today Registered user profiles of 6.4 million is a valuable untapped marketing resource Current Revenue Mix: Component Preview Mix Industry Mix Commission Rate Air Travel 80 45 4 Car Rental 9 6 9 Hotel Res. 8 8 10 Vacation 3 30 13 Preview Goal is to change their mix to closer to the industry standard mix, with higher emphasis on vacations. Economy of scale increases efficiency as company grows: current cost per XCN is $8.93, was $14.69 in 1997. Traditional travel agency cost is $22 per transaction. Total cumulative transactions is now 640,000. Gross margin currently 61%, goal is 70% Sales & Marketing is currently 190% of revenue, goal is 35% R&D is currently 24%, goal is 8% G&A is currently 45%, goal is 7% Operating expense total is therefore 149% of revenue, with operating income at (181%) of revenue. Goal is to get operating expenses to 50% of revenue, with operating income at 20%. Briefing.com summary: Preview Travel is practically trying to redefine itself from internet airline tickets to internet cruise ships. The company appears to realize that the internet drives the airline purchasing process into a commodity. With many sites competing, and on only 4% commission, Preview seeks to become the site for vacation bookings, such as cruise ships and complete packages. With commissions at 13%, and higher per transaction fees, it is the best way to increase their margins. However, Preview currently doesn't really do much of this. To make it a compelling experience, they plan to build whole new technology sections that give you a "virtual" catalog of vacations. Will it work? We don't know. People clearly will buy $350 airline tickets on the internet. Will they fork over $3500 for a cruise booked over the internet? Briefing.com isn't sure, but an investment in Preview Travel is now a bet that they will.