From: Adam Rifkin -4K (adam@XeNT.ics.uci.edu)
Date: Mon Mar 13 2000 - 20:42:57 PST
Tim wrote:
> Oh to be so full of yourself as that statement implies.
> Now I remember why I don't wake up and laugh my ass off anymore.
Rohit, you win the bet. I thought it would be at least a week until he
kneecapped me. :)
I guess I shouldn't be surprised. Just as I shouldn't be surprised that
InfoSpace/NaveenJain is claiming it's
1. Claiming it's going to be a trillion dollar company.
2. Claiming it's an "e-commerce tax".
3. Claiming it's the killerApp for wireless.
I'm surprised anything surprises me anymore...
> Is InfoSpace Bigger Than the Internet?
> By Cory Johnson, Editor-at-Large, TheStreet.Com, 3/13/00 12:25 AM ET
>
> SNOWBIRD, Utah -- InfoSpace.com (INSP:Nasdaq - news - boards) CEO Naveen
> Jain lives in a world somewhere between being tightly wound and having a
> screw loose. If nothing else, he can be counted on to deliver a
> pulpit-thumping presentation.
>
> "There are two kinds of people in this world, right? Nonbelievers and
> believers," the animated Jain said to his audience at the Chase H&Q
> plaNET.wall.street Internet conference last week. "In other words, those
> who don't believe in God, and those who believe in God and InfoSpace.
> That's OK -- the nonbelievers will be converted when we become a
> trillion-dollar company."
>
> The Redmond, Wash.-based InfoSpace.com has seen its share price rise
> more than 16 times in the last year, 136% this year alone, bucking the
> downward trend of so many e-commerce companies. Amazon.com (AMZN:Nasdaq
> - news - boards), for example, is off 16% this millennium. eToys
> (ETYS:Nasdaq - news - boards), once as beloved as a Furby to Net
> investors, has fallen 49% this year.
>
> But after the VeriSign (VRSN:Nasdaq - news - boards)-Network Solutions
> (NSOL:Nasdaq - news - boards) deal -- and the America Online (AOL:NYSE -
> news - boards)-Time Warner (TWX:NYSE - news - boards) merger --
> investors are looking for some new math to value companies. E-tailers,
> suddenly, are not delivering. Specifically, investors are interested in
> InfoSpace.com as a cash-flow machine.
>
> Jain's company isn't the easiest to understand. Too often, it's been
> dismissed with the description "the Internet Yellow Pages." But it's a
> lot more than that.
>
> Essentially, InfoSpace.com is something like an e-commerce tax. At the
> heart of it, InfoSpace.com matches likely buyers with likely sellers and
> takes its cut in many ways. For example, if a consumer sees an online
> ad, then later buys from the advertiser, InfoSpace.com gets a fee --
> anywhere from 2% to 25% of the purchase. If a consumer performs a search
> on a site affiliated with InfoSpace.com -- 87% of the Web, according to
> the company -- InfoSpace.com gets a cut.
>
> "Every time you go to NBCi (NBCI:Nasdaq - news - boards) looking for a
> plumber, we get paid. Every time you go to Go Network looking for a
> phone number, we get paid. We have 2,500 paying partners," says Jain.
> "We are probably the only partner to both Disney (DIS:NYSE - news -
> boards) and Playboy (PLA:NYSE - news - boards) at the same time."
>
> And its business isn't just with online merchants. InfoSpace.com is
> focused on the much bigger offline services economy as well.
> InfoSpace.com is the bridge between online listings and offline service
> merchants. Services, it's important to remember, represent two-thirds of
> U.S. gross domestic product. InfoSpace.com's quarterly revenue has
> grown 1,314% in just two years.
>
> "Nine months ago, I said that most e-tailers will go out of business,
> and I still say that," says Jain. "E-tailers will never have more than
> 10% of commerce. E-tailing is nothing but a glorified catalog. And
> catalogs have never had more than 6% of the market. So how do you help
> the bricks-and-mortar companies drive their businesses online? What
> about the dry cleaners, the plumbers, the people who cannot put their
> businesses on the Internet? That's what we're doing."
>
> But most intriguing is InfoSpace.com's rapid move into wireless. On Dec.
> 6, the company announced the acquisition of two wireless technology
> companies, Saraide.com and Prio, acquired for some $760 million in
> stock. Suddenly, InfoSpace.com has a robust wireless e-commerce
> capability and deals with all of the five regional Bell operating
> carriers.
>
> Globally, 25 companies use InfoSpace's wireless services, including AT&T
> (T:NYSE - news - boards), Vodafone Airtouch (VOD:NYSE ADR - news -
> boards), GTE (GTE:NYSE - news - boards), U S West (USW:NYSE - news -
> boards), Bell Atlantic (BEL:NYSE - news - boards), British Telecom
> Cellnet and Japan's J-Phone.
>
> One of InfoSpace.com's largest shareholders is F. Quint Slattery, a fund
> manager whose Pilgrim Baxter New Opportunities fund is up 829% (!) in
> the last year, and whose Select Equity fund is up 357%. Slattery has
> loaded up on the stock, with 722,200 shares in his two funds. But
> despite his sizable gains, he says he's holding on for a wireless
> payoff, seeing InfoSpace.com as the killer application for wireless.
>
> "Imagine I'm on my way to Joni's house to take her out on a date, but I
> forgot to get flowers," says Slattery, referencing Joni Hanson,
> InfoSpace.com's investor-relations vice president. "If I show up without
> flowers, I'm out. So I dial up flowers on my phone, and it points me to
> Joe's Store near her house in Redmond.
>
> "Now this is the Yahoo! (YHOO:Nasdaq - news - boards) killer, because if
> Joe's doesn't have 'flowers' in its name, Yahoo! won't find it. But
> InfoSpace.com will. InfoSpace gets paid for that search. When I buy
> the flowers, InfoSpace gets a piece of that sale. And InfoSpace might
> tell me that the store next door to Joe's will give me a 10% discount,
> which would mean that InfoSpace gets a bigger cut, and I save some
> money. That's the power of this thing -- revenue every step of the way
> and convenience for the customer. I get the flowers, go to Joni's and
> -- bam! -- I'm in!"
>
> Leaving Joni aside, the pitch is persuasive. And the transformation to
> wireless has been dramatic. According to Jain, more than 300,000 people
> already are using InfoSpace's wireless services. This year, he says,
> 40% of the company's revenue will come from wireless.
>
> To be sure, by any traditional metrics, the stock is a holy terror. The
> company did not turn a profit last quarter. It's trading at 659 times
> trailing annual revenue. By comparison, the S&P 500 average is trading
> at five times revenue.
>
> And yet some of the wiser money managers on the Street can't get enough
> of this story -- or this guy. By the time Jain's presentation ended
> Tuesday, the room was packed, and as soon as he finished speaking, a mob
> of fund managers flocked to the stage to glean more investable
> information. He spent the rest of the day in one-on-one meetings with
> big-time money managers.
>
> From the looks of things, a few may have found a new religion.
---- Adam@4K-Associates.comLet's do it like they do on the Discovery Channel.
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