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Technology Stocks : Healtheon Corporation (HLTH) -- Ignore unavailable to you. Want to Upgrade?

To: nohalo who wrote (168)	5/20/1999 5:34:00 PM
From: JC Reddy	Read Replies (2) \| Respond to of 861

YHOO=$30B; HLTH+WebMD=$20B. Health-care industry is fragmented and it will remain fragmented for a long time for reasons other than technology. There is a reason why WebMD could not generate revenues last year. There is a reason HLTH didn't succeed in the last 3 years in generating any significant revenues (other than from acquired companies). It is almost a joke that a company with 6-months operating history and $70,000 revenues is worth $10Billion dollars. Of course, if you are paying in cash, it doesn't make sense. But you aren't. At the end of the day, HLTH is a software company and in not an Internet company. I have seen it compared with AMZN/YHOO/EBAY. I mentioned it repeatedly. As number of users on the Internet increases, AMZN and YHOO benefit directly. HLTH doesn't. How would you generate revenues from a health portal like WebMD? Is it capable of generating more revenues than Yahoo? How successful will be the IT-integration/process-streamlining/transaction-processing model of Healtheon? How great a business is it? And how much growth rate? How are margins? IT-integration is more than proving data via http protocol on the net. It is a whole cultural integration problem. Will Healtheon grow? Of course, it will. Will it grow at the rate of Yahoo? I seriously doubt it. Is the valuation reasonable? I don't think so. Current price/sales ratio exceeds 200. There is much to be said, but this is enough for now.