eMailbag: eCommerce, PSINet, Euro Chance & More

First reader up this week:


“I just read the press release from PSINet (NASADQ:PSIX) concerning the
agreement to provide businesses with Wireless Internet Access in Southwest
Florida. It seems that PSIX believes there is a lot of potential for
wireless Internet services, especially for businesses in large metropolitan
areas.


I would like to know your opinion on wireless Internet access. Is it a
viable alternative to 128+ K leased lines? Will it garner a substantial
share of the Internet access market for businesses in the coming years? It
seems that they have addressed most of the earlier disadvantages of
wireless access.”



Reply: Metricom (NASDAQ:MCOM) provides wireless services already in
a few key cities. Teledesic, a privately-held effort backed by Bill Gates
and cell-czar Craig McCaw, also aims at this wireless market. It has to
launch 244 satellites to get there, however, so I suppose we know where
Bill’s billions end up–floating in the upper atmosphere.


PSINet’s agreement with Airdata WIMAN Systems, Inc., and Wireless One
Network in Florida, operates in the unlicensed 2.4 GHz. – 2.4835 GHz.
spread spectrum
band at speeds of 115.2-128 Kbps.


Given the voice crackle of cell networks, however, we wonder how the
quality and actual speed of this service will be, especially with the
sensitivity of packet-based data?


Go Swiss


I work at a Swedish investment bank, with the corporate finance
department. My focus is IT-companies. I have begun to have contact with a
great deal of Scandinavian Internet Retail companies that are quite
successful and are now looking for venture capital.


I am very interested in your view of the global Internet Retail market. Do
you think that European companies stand a chance against their U.S.
competitors. ”


Reply: Internet retailing, “e-tailing” if you will, operates on many
levels from global to local. European start-up companies do stand a chance
in the global arena but they must understand the dynamics at that
level–who they are selling to, who’s on the Web, and what marketing and sales
would reach them effectively.


Fulfillment, virtual warehousing, and a number of other issues must also be
dealt with. Unfortunately, European venture capital is scarce which often
hinders any great ideas from getting off the ground.



Quick Silver


“Do you ever look at non-Internet specific companies in your stock index
column? Perhaps electronic commerce companies that have a large play in the
Internet space, such as Sterling Commerce (NYSE-SE)?


Sterling Commerce Inc., is the leading global provider of
business-to-business EC software solutions and value-added network
services. After helping establish the industry 25 years ago, Sterling
Commerce is increasingly being recognized as an Internet commerce pioneer.”


Reply: I fully expect established electronic commerce companies to
focus on the Internet as the future of their services. If they don’t, new
companies will emerge and take their place in the food chain. Similarly, I
believe EDI will also be absorbed into the Internet or Internet-based
network.


ISDEX Mutual Fund?


“Is ISDEX, Internet Stock Index, also a mutual fund?


Reply: We get requests regularly from readers to make ISDEX a mutual
fund. In order to get the kind of necessary exposure and trading in it, we’d
like a company such as Fidelity to pick it up.


NetWhere?


The Novell article (ISR, February 27) is really commendable because of its
most accurate analysis in terms of the company’s technology, vast number of
users, and yet lack of recognition by investors because of marketing weakness.


Reply: Another example of how Microsoft outmarkets a rival. Novell
seems to need that revival and paranoia that turned Microsoft around in
1994.

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