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Microcap & Penny Stocks : TSIG.com TIGI (formerly TSIG) -- Ignore unavailable to you. Want to Upgrade?

To: Osaka Joe who wrote (25043)	4/11/1999 12:52:00 AM
From: ztect	Read Replies (2) \| Respond to of 44908

Osaka...Ko ba wa...(Romangi correct???) Anyway.. interesting you mention coupons... Had dinner with a design director of a major marketing firm tonight. She noted that coupons are expensive and have a redemption rate of a womping 2%.... Let me repeat that...two (2) percent.... Many companies, including her clients, are looking for alternatives to couponing because it is an expensive way to generate a customer base. If you surf the net, there already are plenty of online coupon sites (eg. hotcoupons.com ) and other incentive oriented programs to build customer loyalty like mypoints.com and click rewards.com. I belong to both...don't really use either despite the "spiral" marketing that shows up in my email. We also spoke about the premise that "branding" online will function like branding off-line... She concurred with my sentiments. Going to another store online requires clicking a mouse. Especially with search engines that provide cost comparisons, branding becomes less significant. bottomdollar.com As these low cost search engines become more familiar and as people become more accustomed to using the net, the low cost provider regardless of logo identity will be clicked. The idea behind branding is to unconsciously ingrain the brand Logo into the end user's brain and thus create traffic to a site. This strategy as done by Amazon requires a ton of money. Amazon is wagering that they build loyalty through this identity and expansion of this identity into other products. However, Amazon cannot be the low cost provider unless they sell below costs and make money from web site advertising. This is admiringly Buy.com strategy. Why? Because Amazon spends too much money on trying to direct people to their site via traditional media, positioning and banner placement. Traditional media is very expensive and my marketing friend noted that banner advertising, to date, isn't very effective How can Amazon cuts prices unless they cut costs or raise revenues via other means? Cutting costs means cutting overhead to increase the margins. Amazon spends 39% of costs just trying to build its brand name. Its marketing strategy is based upon this. They have very slim profit margins to begin with, thus coupons or rebates without cutting media exposure doesn't work. Raising revenues means Amazon must sell advertising on its site AND make money off of the shipping. High shipping fees are the means by which many e-commerce try to make up short falls. However the aggregated shipping cost undermines the low cost position. The costs of advertising on a site are directly related to how many eyeballs, hits and pages that site generates. However the fees for all advertising is going down because more and more sites are being launched every day...i.e. more competition for advertising dollars. Consequently, I especially don't like Buy.com's b-plan and do not think that this company will ultimately be successful. With a "card", Amazon still is paying for its expensive advertising campaign to attract eyeballs...so is CDnow...A card for either of these two with discounts will further cut into their non -existent margins. The Internet with e-commerce sites and auction sites benefits the CONSUMER not the seller. Now per some of your words... "...Amazon ALREADY has the advertising, ALREADY has the popular website, ALREADY has the contacts necessary to offer cards to individuals, companies or promoters. Unlike TSIG, which is still putting together its management team, Amazon has already built their infrastructure, they will not have to go out and develop accounts the way TSIG must. All they need to do is say "Here's a FREE card/coupon, take it or leave it. If you use it, you save money and we keep you as a loyal customer, if you don't use it, WE save money and you might come back anyway. Costs us nothing, what the heck?"..." Amazon already is NOT making any money...Amazon is already not making money because they are ALREADY spending a ton of money on advertising that undercuts their bottomline and their ability to be the low cost provider. Amazon HAS NOT yet figured out how to make money. Amazon cannot further cut into its slim margins with free cards or coupons since the margins already are slim. Now is Amazon making enough money from advertising space on its site to offset low profit margins? Nope. The premise is that Amazon's increasing revenues will mean that these revenues are due to increased traffic that therefore makes advertising space on their site more valuable. Again an Amazon card may generate more revenues through volume to the site BUT not more profit unless the premise that the web site space becomes valuable enough for advertisers to sell goods at costs Remember the good old days when people bought stocks on the fundamentals? "...As for charities, just as a possibility, why can't Amazon (or anyone else) give cards away for free, and then give them a percentage from each sale. Far easier for the charities to dump millions (billions?) of cards on potential cd buyers, but it will only bring them money if they work with a high volume web site like Amazon, CDNow, Music Boulevard. Just one idea, I'm sure potential competitors will be able to think up better ideas once TSIG shows them how much is at stake...." The point of the Card is to bring people to sites to buy products. Amazon cannot afford to give away percentages of sales because they make little to no profit from the sale already due to their high costs of advertising. Currently e-commerce is still in its nascence, what may be the popular site today ....may not be the popular site tomorrow for reasons like those above I already stated. "...Does that mean that some chocolate company has a legal case against TSIG for infringing on their Babe Ruth account? Does some sports bag company have a legal case against the Tampa Bay Lightning? (I received a beautiful sports bag at a Mets game last summer. Would have just thrown away a music card if I had received that instead.) If Pepsi offers a coupon to Safeway shoppers, is Coke "infringing" by using the same concept?...." Names and company names are registered legal entities. The first thing you do when you start a business is do a title search. Large companies frequently sue companies that infringe upon their names with names that are similar (One of my clients was sued by the Hard Rock Cafe and thus changed the Cafe end of his restaurants name to something different ). A person's name legally belongs to the heirs of that family for which companies pay a royalty. Don't know the particulars of Babe Ruth though. Sports teams names are legal domain of a sports team or league. Manufacturers are suppose to pay to be able to brand their products with these names. Many illegally don't. A Pepsi coupon or a coke coupon is a money back clipping. A coupon is a incentive for a single item, not an incentive program to reward loyalty. Copying the incentive program is the infringement not copying the card. "...Will the NMF ever bring in any revenues if TSIG does not spend the time and money on some hand-holding? How much did it cost to send all those packages to all those schools involved with Lifetime Learning Systems? As I think about it, Amazon is so well known already, and so easy to use, that they wouldn't have to spend any money on helping charities. Just give 'em a coupon and continue business as usual...." Regarding NMF and Life Time...good questions...would also like to see some progress from Phil Esposito. Regarding Amazon giving coupons away. Coupons cost money. Unlike a card they don't generate money. Coupons aren't redeemed typically. Plus Amazon doesn't MAKE money and can't afford to discount further, because they are spending too much on advertising in media and not generating enough from selling advertising on their web site to cut into their profits margins with the costs of coupons and the lost revenues due to the discounts from coupons.. Sincerely, ztect Disclaimer: IMO TSIG has been successfully restructuring itself with an unique marketing strategy and integrated e-commerce business model with some very qualified new management. This restructuring is yet to be reflected in the company's filings. The company is fully reporting. These are my conclusions and mine alone. I encourage each and everyone to come to their own conclusions. I suggest those interested in understanding TSIG start their research via this link below to a website of compiled "due diligence". Do your own research before taking any position in any company to fully understand the risks associated with your investment decisions. This page includes several field reports on the company. geocities.com

To: Osaka Joe who wrote (25043)	4/11/1999 8:42:00 AM
From: ztect	Respond to of 44908

Ohayo...Osaka San...backing up first..for another counter point You wrote..... "...As for charities, just as a possibility, why can't Amazon (or anyone else) give cards away for free, and then give them a percentage from each sale...." Let's take a look at this model a little bit closer. First, and obviously, charities won't be able to project their own receipts because their receipts are contingent upon sales at the site. There is no donation if their is no sale of product, so there is no immediate and accountable profit share or "donation", and thus the whole notion of "redemption" is paramount because of this contingency upon a percent of sale. Second, this model requires accounting for allocation of donations dependent on which charity's card generated the sale. Not necessarily a difficult thing with the appropriate software, but extra accounting (and over head) none the less. Third, this is essentially a "you bring us a new customer, we will give you a percentage of that customer's sales"....I've seen this employed with memberships at clubs, I have never seen this employed in P.O.S and retailing. Many retailers like Whole Foods and Home Depot just give a percentage of receipts to charities regardless of how the customer was received as a measure of good will to the communities in which they are situated. Fortunately, for both of these named brick and mortar retailers they sell products with large profit margins that aren't being pinch severely by online e-tailers. Products that move in an e-tailing environment are those that can be liquidated (e.g. Egghead, and other auction sites) or those that aren't touchy feely like books and cd's. Margins are slim already. Cutting into margins further, to me at least, makes absolutely no sense unless the goal is to generate volume at the site to try to make that site more valuable for advertisers to place banner advertising on the site. Volume of eyeballs...not volume of sales. Finally and fourth point, giving the card away obviously doesn't generate any sales from the cards. Revenues from card are measurable and not contingent on sales at a site for the charity and also generate revenue for TSIG.com. Companies with slim margins look for methods to generate additional revenues that people don't take offense to. Can't remember exactly what Amazon did, but Amazon created and later rescinded selling book reviews or some thing like that because the customers were incensed by this attempt to make money. In addition, and on another note..ask Microsoft about the legalities of squashing competition. Technology and the Internet are rapidly changing. Microsoft and Netscape and others are constantly changing to keep up with this change and to remain competitive. With e-tailing to what is a global market, their is certainly the opportunity for more than one e-tailor in the marketplace....room for more than one auction site. However, being flexible, unencumbered by the constraints of size affords flexibility, and having the ability to move quickly to position one's company in this Internet climate is an asset if a company is nimble enough to leverage the "elephants' " weight against them. Just look at what Amazon did to Barnes & Noble and Borders. These brick and mortar elephants didn't know what hit them until Amazon flipped them on their heads and until Amazon became the darling of Wall Street. Anyway..... Sincerely, ztect Disclaimer: IMO TSIG has been successfully restructuring itself with an unique marketing strategy and integrated e-commerce business model with some very qualified new management. This restructuring is yet to be reflected in the company's filings. The company is fully reporting. These are my conclusions and mine alone. I encourage each and everyone to come to their own conclusions. I suggest those interested in understanding TSIG start their research via this link below to a website of compiled "due diligence". Do your own research before taking any position in any company to fully understand the risks associated with your investment decisions. This page includes several field reports on the company. geocities.com