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Technology Stocks : AUTOHOME, Inc -- Ignore unavailable to you. Want to Upgrade?

To: Elmer who wrote (9368)	5/11/1999 11:21:00 AM
From: ahhaha	Respond to of 29970

CSCO was an early beneficiary of hardware for the Net. They have evolved but the competition will bury them. Technological obsolescence turns technological gorillas into chimps. Size precludes a gorilla from adroitly moving where it is necessary to go because the risk is too great. The only option is to cut price and quality to undermine the competition using your indigenous economies of scale. This brings about a slowing of shareholder equity and opens up the inexorable move to debt accumulation which eventually terminates the company. On the other hand ATHM is like MCD. It is a consumer standard. The public has no idea of what Cisco does except that it has something to do with Pancho.

To: Elmer who wrote (9368)	5/12/1999 12:52:00 AM
From: GraceZ	Read Replies (1) \| Respond to of 29970

If you really want to understand why ATHM is being priced where it is ( and AOL for that matter), you might try reading Net Gain and Net Worth by Hagel & Armstrong. I certainly agree with most of the assumptions put forth in Gorilla Game and certainly they have played out in the past. (I was an Intel stock holder for years) If ATHM had both proprietary architecture and high customer switching costs SI is a powerful example of a network with a positive feed back loop that will in fact have high switching costs for those that use it, if you consider costs as value lost by leaving the network. ATHM and its monstrous valuation is that it is just a transactions company perhaps in its present form, but not in its intended future form.