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Technology Stocks : Network Solutions (NSOL) -- Ignore unavailable to you. Want to Upgrade?

To: KeepItSimple who wrote (858)	4/13/1999 7:37:00 AM
From: MoonBrother	Read Replies (1) \| Respond to of 1377

J.P. Morgan's Analyst's Strong Recommendation On Buying NSOL on Any Weakness. Enjoy! ----------------------------------------------- 07:49am EDT 12-Apr-99 J.P. Morgan (ARCHIBOLD, R. (1-212) 648-6231) NSOL NETWORK SOLUTIONS: WORKING THROUGH THE DIN; FOCUSING ON THE OPPORTUNITY Network Solutions (BUY) WORKING THROUGH THE DIN; FOCUSING ON THE OPPORTUNITY Network Solutions will maintain its dominant position in the domain name registration market for the foreseeable future and therefore, investors should look past the governance cloud to see the value in NSOL's business model and the opportunities ahead for this Internet savvy enterprise. We reiterate our Buy rating and $150 price target on NSOL as we believe the shares offer investors an unusually attractive vehicle to participate in the growth of the Internet. The charged political environment under which competition to the domain name system is being introduced has increased the volatility in the shares. We would view any weakness arising from this volatility as an attractive buying opportunity NSOL common shares. We believe it is important for investors to sort through the din that has been created with various participants disseminating confusing and sometimes misleading information. We believe investors should be aware of and focus on the following: Negotiations with the Department of Commerce on Registry Price: Network Solutions and the Department of Commerce (DOC) are currently negotiating the price NSOL will receive from new registrars as the sole registry for .com, .org and .net. Network Solutions has initially proposed a $16 fee, we believe it is reasonable the registry fee will ultimately be between $8-10 per name per year. It is important to realize NSOL must build a commercially viable shared registry system (SRS) with full redundancy, security, authentication procedures, offsite backup etc. as well as ongoing supporting operating costs. It is not opening up its current registration systems or processes to the market. We expect the DOC to adopt a cost/plus model for determining an appropriate fee for the registry service that will also provide an adequate return for NSOL. As such, we would view any weakness in the share prices as an attractive buying opportunity. Back to the Business.. Distribution - remains one of NSOL's key advantages. Major partners number in excess of 150 with over 5,000 additional resellers of domain names for NSOL. The five testbed registrars and additional participants in the market will serve to stimulate additional demand for domain names but will be competing with the established distribution channel of NSOL. First Quarter Results - The March 15th announcement NSOL has registered its four millionth name gave us a good preview of a strong revenue quarter with registration likely to exceed our expectation of 620,000 for the quarter. Directory Services - We believe NSOL's upcoming directory services offering will be positioned as the de facto yellow pages on the Internet. The directory services offering has the potential to leverage NSOL's existing customer base by selling them additional services. Moreover, it could be NSOL's first advertising based revenue opportunity. CEO Search - The company has indicated the search for a new CEO is going well and are pleased with the candidate finalists. We expect the new CEO to be announced within the next 30 days.