For what it is worth, this was an internal email sent to employees at USWEB/CKS on 4/10/99. USWeb just yesterday got the nod for Mercata.com, Paul Allens new venture, funded by his Vulcan Ventures. The company is winning new business everyday. Mypoints.com, Wireless Dimension.com, to name a couple that have been won in the last couple of weeks. I am having a hard time trying to figure this one out. Also the earnings will be broadcats live next Tues. the 20th at 4:30 p.m. EST at vcall.com
From: Robert Shaw
>To: "'corporate-all@uswebcks.com'" <corporate-all@uswebcks.com>
>Subject: Important Message
>Date: Sat, 10 Apr 1999 15:38:29 -0700
>X-Mailer: Internet Mail Service (5.5.2448.0)
>
>
>
>Normally I don't respond to stock fluctuations and rumors. However, giventhat the swings over the past few days have been more substantial, I'm sure many of you are wondering the cause. So let me make a few comments.
>
>Our financial progress
>
>USWeb has consistently met or exceeded analyst expectations since going public in 1997, and USWeb/CKS has made good progress in the first quarter.
>As Toby and I have previously outlined in public conference calls and
>presentations, and though many challenges remain for us to overcome, the financial performance of the company has met our expectations for the first quarter. The backlog of new business for the second quarter looks extremely strong, and the principal requirement to capitalize on this enormous opportunity is recruiting. This is something we are focused on as priority number 1 for the foreseeable future.
>
>Strategic positioning of the firm
>
>Every major industry analyst believes that integration of technology and >marketing expertise is required for the largest-scale Internet e-commerce initiatives. The most advanced (and expensive) Internet initiatives depend upon both cross-media marketing campaigns (that integrate Web, television, and print) and deep systems integration and application development services.
>
>Both USWeb and CKS observed over a year ago that a large percent of their client bases were seeking an "end-to-end" partner, and this fact served as the primary motive to merge. USWeb/CKS clients have since warmly received the merger, and cross-selling/joint-selling of services has already spread across the firm after only a few months since the merger.
>
>USWeb/CKS presently has a larger number of technology and marketing
>professionals dedicated to e-business than any other pure play Internet services company in the world, by far. This is an envious position within a marketplace that virtually all major analysts project to experience remarkable growth in the next several years.
>
>Why acquisitions?
>
>The question has often been asked: why have you conducted so many
>acquisitions? The answer is that the professional talent skilled in Internet consulting, marketing, and engineering services is extremely hard to find. A strategy that blends aggressive recruiting and acquisitions is the strategy most likely to build a market leader. USWeb/CKS' integration program is
>comprehensive and detailed. The acquisition integration process proceeds as if we were recruiting whole groups of professionals, and all employees are integrated into one firm. Unlike some other firms which are better categorized as holding companies or loosely integrated alliances, USWeb/CKS is committed to a one-firm vision. In this blending of diverse specialized skills, we are building a general capability that spans the reach demanded by increasingly complex client engagements. Those who suggest that you cannot be both broad and deep, in my view, are not only wrong, but are missing the greatest opportunity in professional services to emerge in this decade.
>
>Major client relationships
>
>USWeb/CKS serves dozens of Fortune 100 companies, and has for some time. Many of these relationships are strategic, many are tactical. For those relationships that are project-oriented and tactical, it must be remembered that most Fortune 500 companies have come to truly appreciate the fundamental importance of the Internet only in the past few months, and many of these firms still do not appreciate the significant role that the Internet will play in their future. Some of USWeb/CKS' major client relationships have been won by USWeb/CKS proper, while others have been won by firms acquired by USWeb/CKS. All of these client relationships were at some point awarded to our combined firm.
>
>The management team of USWeb/CKS believes that it has a larger number of major client relationships than any other pure play Internet consulting firm. The most important numbers to consider with respect to USWeb/CKS major clients are:
>
>Q4 1998 Top 10 Accounts: Average Annualized Revenue Each = $8.3m, up from $6.4 the prior quarter
>Q4 1998 Top 30 Accounts: Average Annualized Revenue Each = $4.4m, up from $3.5 the prior quarter
>
>Historical and prospective growth
>
>As you know, USWeb/CKS grows organically and through acquisition. USWeb has demonstrated high double-digit organic growth since inception. Upon combining with CKS, the blended organic growth rate of the firm has always been projected to slow due to the typically-slower growth of the marketing communications sector, and we're now growing off of a very large revenue base. A few skeptical analysts have recently seized upon this as "news".
This is "old news". This has been discussed since last fall. As we've
integrated USWeb and CKS operations, some units were redundant and/or
nonperforming, and have been reorganized or eliminated (with easonable
write-downs where appropriate), exactly as we said we would do months ago. For the now-integrated "going-forward" business units of USWeb/CKS, organic growth remains strong. And our acquisitions continue to add depth, breadth,and geographic reach to our value proposition.
In summary, I feel very good about our market position, expertise, client base, and strategy for the future. Many challenges remain in our focus: recruiting, professional development, completion of integration activities, and final organization of practices.
Thanks for your time today, and here's to a great Q2!
Best,
Robert
R O B E R T W. S H A W
Chief Executive Officer |
