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Support.com: Will Investors Support It?

An IPO with a dot-com? Isn't that the death knell? Well, maybe not. The company is Support.com and it is in a market called eSupport. Yes, it uses the Web to help automate customer support.

This is definitely much needed. I often run into problems while dealing with online companies - especially e-commerce concerns. Shoddy service not only results in a lost sale, but also bad "word of mouth."

Well, as for Support.com, its IPO is planned for this week. The lead underwriter is CS First Boston and the proposed ticker symbol is SPRT. The price range is $11-$13.

So far, Support.com is providing support for lots of corporate customers. The list includes such biggies as Cisco, Compaq, JCPenney and Samsung.

These companies are getting such products with names like Support Portal, Foundry, Healing Agent, and Support Center. These technologies personalize the support process, help to enhance rapid resolutions and find efficiencies.

Yet, the market for Support.com is potentially huge. According to IDC, the market is expected to grow from $3 billion in 1999 to $14 billion by 2003.

Despite the big market, many of the players are still small. And Support.com is no exception. In the past quarter, revenues were $1.9 million. There are 31 customers.

What's more, Support.com's products are fairly complex. As a result, the time for installation can be long, which can cause volatility in revenues.

But the company does have serious backing. The venture capitalists include Accel Partners, Softbank, and Bowman Capital Management.

The eSupport sector has been strong. For example, Metasolv went public in late 1999 at $19 per share. It is trading for $53-3/8. Or look at Serena Software . Its IPO was in early 1999 and had an offering price of $15. The stock now trades at $28-1/2.

With a rising IPO market and nice comparables, Support.com should have a favorable IPO this week.