Bamboo.com Hopes Investors Zoom In On IPO

Maybe someday everybody will shop for new homes and office space on the
Internet. Maybe even sooner, enough people will do it so that some
companies offering virtual tours of real estate properties will
consistently make a profit.

But that time is not now, and it’s hard to say when it will arrive. When
it does, though, bamboo.com plans to be the market leader.

The company registered Monday for an initial public offering of stock
designed to raise $57.5 million, money the company is counting on to
fuel its rapid-growth strategy.

That plan resulted in a dramatic increase in revenue in the first
quarter this year. The $88,658 in sales for Q1 is more than four times
the revenue from Q1 ’98, and more than 1998’s total of $77,410. Small
numbers, though the trend is good.

The flow of red ink also quickened, with net loss in Q1 topping $6
million, compared to losses of $0.53 million in last year’s first
quarter and $1.8 million for all of ’98.

Based in Palo Alto, Calif., bamboo.com was formed in 1995 as Jutvision
(supposedly based on a nickname of one company founder), switching to
its current name only two months ago.

The company uses Java-based proprietary technology that allows Web users
to take virtual, 360-degree tours of real estate properties in the
United States and Canada. Viewers can look at the exterior and interior
of a property, and have the ability to pan and zoom.

Bamboo.com produces the videos, using nearly 200 video professionals
located across the continent. The company derives revenues by charging
real estate agents a fee of as low as $100 to make a videotape and
distribute it through numerous Web sites, or even e-mail.

Some of the most popular Web sites for home shoppers offer bamboo.com’s
video tour service, including REALTOR.com, HomeStore.com and Homes.com.
Portals such as America Online, @Home/Excite, Infoseek and news site
MSNBC.com.

Still, despite any hype you may hear, video in any form on the Internet
is still early-stage, primarily due to bandwidth problems. Bamboo.com
acknowledges this in its S-1 filing:

“Our success will depend in large part on widespread market acceptance
of virtual tours to display properties online,” the company says in the
SEC document.

And that will depend on the quality of the video experience. A sample
virtual tour offered at www.realtor.com looks pretty good, but is
sluggish coming over a 56K modem. Most surfers wouldn’t have the
patience to slog through a number of these at slow speed, which is the
speed most consumers are stuck with today.

Further, bamboo.com’s target market – online real estate – is also in
its early stages because many real estate agents have been slow to
embrace the Internet.

The bottom line is that bamboo.com is asking investors to bet on their
horse in a race of unknown duration and with unknown stakes. In the
current Internet IPO environment, that could be a tough sale.

Lead underwriter for the offering is Prudential Securities. The proposed Nasdaq symbol is BAMB.

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