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.

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