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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: kash johal who wrote (74881)	3/1/1999 6:10:00 AM
From: Amy J	Read Replies (1) \| Respond to of 186894

Re: ">Re: wipe out AMD's positive cash flow altogether.No one will step and save AMD and it will perish. Nihil You may well be right of course. Yet AMD is gaining market share quite rapidly ... I am curious why you feel that this is happening." Kash -------------------------------------------------------- Kash, with the exception of Internet etailers (e.g. Amazon.com) who are in an expansion race to get there before the traditional retailers get there, the formula you mention above spells for me a potential acquisition formula. My experience has been, when a company starts charging really, really hard to gain market share, with an almost near-abandonment to other business fundamentals (like CF/profits), they're on one mission: make or bust. And when a company's "make it" prospects are slightly shaky, the back up plan is always an acquisition. And how would AMD bid up its acquisition value? NSC paid a lot for Pandora (sp?) because they were profitable. Problem is, AMD is not profitable. So, the only other way to bid up their value is thru market share. This assumes an entrenched CPU market share has a value to the bidder-and it would,if the buyers are loyal. Are CPU buyers loyal? Doesn't seem so, but if they are,that could explain why AMD is almost recklessly driving hard to increase their market share-to bid itself up. Who would want AMD? Here's a wild acquisition proposition: First, let's assume Amazon.com's sell-above-cogs biz model will fail, or at least, let's assume there are some people at Compaq who believe the "sell-above-cogs biz model" will fail to the "sell-at-cogs and earn profit through e-ads" biz model. I don't know which Internet biz model is winning out, but I could easily check this out by looking at Amazon's two new competitors who are using the sell-at-cog biz model. However, I rather suspect Amazon's biz model is beating the sell-at-cog model, esp since Amazon has product focus which translates into 1 large distributor (BT) who carries most of their products. Also, BT owns Amazon stock. Note: Compaq could separate out Alta Vista (AV) and take AV public as a portal business. Note: Compaq just pulled it's e-commerce site the other week. Why? Is it because they couldn't be sufficiently profitable in it when compared to Dell? If so, that's a serious problem. So, desperately serious that a desperate company does something desperate like: - Compaq buys AMD so that it can ultimately get chips at cost in order to use the "sell-at-cogs and earn money thru e-ads" biz model. - Lower cost could let Compaq better compete against Dell - Now that the cost problem has been solved, Compaq opens their own e-commerce site and implements a "sell-at-cog" biz model. Which is just what two of Amazon.com's competitors recently did. However, these two have the disadvantage in that they aren't focused enough in their product spaces, like Compaq could be (only sells PCs) - Now Compaq ships AV on everyone of their computers which acts as a portal back to AV or to their e-commerce site - So, every Compaq translates into an eyeball and a potential e-commerce shopper - And in Internet space, an eyeball is how you win the portal game and generate ad revenue or a e-commerce buyer This sounds too wild and has too many assumptions. Also, I'm not sure: - would Compaq really lower their cogs by buying AMD - are CPU buyers really loyal? - can Compaq really be a portal player on the basis of only their product unit shipments? (i.e. are their unit shipments really that high?) How high are they and how do the figures compare to the other portal eyeball counts? - how is the Internet ad revenue biz model turning out? is it successful? Broadcast.com is an example of what could be a rather successful Internet ad revenue biz model But this sounds a bit too wild. Other ideas? Amy J