First reader up this week writes:
“Steve, where can I find an ISDEX Fund?”
Reply: You can’t. ISDEX is an index, although we’d like to see a big
mutual fund company consider it. Fidelity? The interesting thing was that
in 1997 on an average basis ISDEX gained 49%, despite some well-known
losers.
The winners were just that much stronger. However, we can’t say how 1998
will go. In context, though, Morgan Stanley’s Mary Meeker, a guest
of ours at Fall Internet World, pointed out some tidbit worth noting:
Microsoft (NASDAQ:MSFT) market capitalization has increased more in the
past two years than the combined value of ALL of the firms we call “Internet.”
Yowza
“Hi, I love Yahoo, but how can Yahoo’s stock price be so high? If it
increased its revenue by 1000% AND improved its profit margin from–40% to
10%–its P/E would still be a mere 53! Are investors insane? Somebody
shhtop meh!” [Jim Carrey, The Mask]?”
Reply: After watching Yahoo (NASDAQ:YHOO) in living color, we wonder
how much elasticity is in the stock price, and so far about as much as Jim
Carrey’s facial expressions.
Calling Down Under Value
“I have been looking at an Internet phone company called OzEmail (ticker
OZEMY) trading at only 7 x’s earnings. The company has some interesting
long-term partners (e.g., Mitsubishi). Any thoughts?
Reply: OzEmail (NASDAQ:OZEMY) trades on NASDAQ as American
Depository Receipts or ADRs, one share = 10 ADRs. It’s Australia’s largest
ISP and just acquired a few smaller ones. IP telephony is one aspect of its
services. Australians are warming to the Web and we figure could be a
bigger presence in many realms soon, from e-commerce to content.
What’s Hot In 1998?
“How about Westell Technologies (WSTL)–king of the ADSL technology. It’s
getting
contracts from GTE, Bell Atlantic, etc.; 50 or more are beta testing the
equipment
and technology with the major companies showing a dedication to the
technology along
with Microsoft & Intel. After the Asian market crisis, the stock is almost
trading at its all-time low! How’s that one for a 1998 pick?”
Reply: We think DSL could be the telco world’s best hope of fending
off the cable industry’s foray into high-speed services. Telcos have a jump
in many ways since their networks are already switchable (two-way). If DSL
proves reliable and the telcos can roll it out–two big concerns here–then
Westell could get more attention on Wall Street.
Westell, a leader in DSL, made a failed bid for Internet communications
firm Amati last September, yet Texas Instruments outbid it. In the “why
can’t we still be
friends department,” in what looks like a good move, Westell and TI agreed
to cooperate on DSL. So Westell gets the benefit of Amati without the
dilution of a merger. It also has agreements with most of the telco world for
DSL. We’ll be watching Westell.
Sprung
“Steve-Regarding your column on Earthlink, may it be the Queen of customer
service, but MindSpring is the King. Long live the King!
–Mike McQuary
President & COO MindSpring
Reply: In the interest of fairness we’ll let you guys battle it out
in the marketplace for rights to “king” or “queen.” From our perspective
both firms are on to something with the goal of pleasing the customer.
Funny how that simple notion gets lost so many times in the technology
sector.
Automated customer support, endless voice menu systems,
confusing documentation, Cyrillic technical documentation, these seem to be
the status quo for many companies in the PC and Internet industries. People
want people, not Yamigotchi or whatever that PC virtual animal is that
seems to exist at the customer service desks of many firms.
Dear Bill’s Outlook Express
Dear Steve, contrary to popular belief, Microsoft does not own the Internet.
Nor does it own personal computing and the future of the country.
The DOJ is right in its attempt to curtail the misjudgments of the infallible
upper-level management at Microsoft. Bill being the architect of this group
should realize that if they push it much further it could disrupt the
opinions of those much more powerful than they!
This being the opinion of the American people. No one likes a bully. The
Internet is only getting bigger. Regulation has arrived. If the upper tier
of Microsoft persists
it will indeed fall short to the powers that be. Bill will rule his
empire but it will not include the Internet.
Reply: We couldn’t help but notice the irony in the fact that you
used Microsoft’s Outlook Express to send us that message….
