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News Updates - 6
March 2001 AirClic could make mobile e-commerce a reality - Philly Tech Our lesson for today: e-Learning - Red Herring magazine i2 may acquire Rightworks - CNet The Amazon slasher - The Industry Standard
Meanwhile, your husband is browsing the newspaper's real estate section and finds an attractive four-bedroom house for $300,000. Using his own AirClic-enabled device, he scans in the ad's bar code to retrieve an online description of the house and all its features. AirClic Inc. of Blue Bell (Executive VP of IS - Suren K. Gupta) is one of several companies beginning to offer technology to connect print media and product labels with online information. By linking the real and virtual worlds with its bar-code reading technology, AirClic aims to make mobile e-commerce simple. The company's own success in connecting with deep-pocketed investors and coveted strategic partners has quickly made AirClic a viable contender for taking the lead position in its space. In January, AirClic announced it would receive $290 million in funding from a group of investors, including Motorola Inc., Ericsson Business Innovation AB, Symbol Technologies Inc., and a private investor group led by Goldman Sachs. AirClic received $15 million in first-round financing last March. Investor Dennis Carey remembers sitting down with AirClic founder and chief technology officer Peter Ritz in late 1998 for a demonstration. "I thought this was a big idea," said Carey, who is vice chairman of executive search firm Spencer Stuart & Associates. "But most big ideas don't go very far. We talked about that." A
LUNCH TO REMEMBER "Motorola decided we needed a global standard so they decided to connect the dots with Ericsson," Carey said. "Symbol [Technologies] was required for their intellectual property so we had to see if we could partner with them." TIME
SAVER Daniel O'Brien, a senior analyst with Forrester Research, said AirClic would catch on "if they can demonstrate to buyers that this can take the order time from an hour a week to 10 minutes." O'Brien said marketers are interested in AirClic's technology because it allows them to accurately measure the response to a particular ad. Publishers also like it, he said, because it gives them a way to collect concrete data on the effectiveness of their magazine ads, thus allowing the magazine to raise ad prices. But O'Brien added that he would remain a skeptic of AirClic and its competitors until he sees that consumers are willing to pay money for the firm's scanning devices. AirClic's competitors include Digital Convergence Corp. of Dallas, which makes a handheld scanner called the "CueCat," and Digimarc Corp. of Tualatin, Ore., a maker of digital watermarking technology. Officials of AirClic say their first product, a tiny wireless laser scanner to be introduced this spring, will cost between $30 and $40. Eventually the scanners will be incorporated into cell phones, personal digital assistants and other Web-enabled items. With 50 employees in Blue Bell and 30 in Sweden, AirClic will focus first on business-to-business e-commerce applications, and later on marketing to consumers, said David Spitulnik, vice president and director of corporate development for Motorola. With predictions that wireless e-commerce will explode in coming years, AirClic and its partners hope to flood the world with miniature devices that make virtual transactions convenient anytime and anywhere. Heard
from the buy side - Our lesson for today: E-learning E-learning which encompasses all electronic media from CDs to the Web - has a number of advantages, the most compelling being the substantial savings over classroom-based teaching, the convenience of 24/7 access for students, and the ability of the best, most effective teachers to reach a wider audience. The time to buy stocks in this space is now, while the leading e-learning companies are oversold and largely ignored by the media and institutional investors, and while the general public is still apparently ignorant of this technology and its potential. Currently, e-learning is a fragmented industry and even the leaders are small-capitalization stocks. Two with huge growth potential are Docent and (Indian-born Subrah Iyer's) WebEx Communications. WebEx is the leader in “live interactive multimedia communications,” or Web-conferencing. WebEx’s products have extensive applications including conducting virtual meetings with employees scattered around the globe, online software development with partners or customers, and, of course, e-learning. Unlike competitors, WebEx’s technology does not require customers to open special port connections, making it easy to use. By recognizing the power of such partnerships, WebEx is expanding its market share significantly and is on the way to becoming the brand name in Web-conferencing. Web-Ex should achieve profitability by the fourth quarter of this year, generating $65 million in revenue in 2001. By 2002, revenue could hit $86 million. Investors should note that even if the U.S. economy is headed for a downturn, Docent and WebEx have a good chance of prospering because they save their customers money on vital training and are not capital-intensive investments. i2 may acquire Rightworks Software company i2 Technologies is in talks to acquire privately held Rightworks for about $250 million in a deal that could be announced as early as the end of the week, people familiar with the situation said Tuesday. In acquiring Rightworks, i2 is effectively closing the lid on its rocky partnership with Ariba, whose software competes directly with Rightworks. Rightworks makes software that enables companies to purchase indirect, or finished goods, and raw materials over the Internet, and provides software to set up business-to-business online exchanges. i2 already has the market for raw materials procurement sewn up, analysts say, through its own supply-chain management software, so buying Rightworks rounds out its procurement strategy."This all makes perfect sense," said Joshua Greenbaum, principal of Daly City, Calif.-based Enterprise Applications Consulting. "The pressure is on for i2 to fill out its product suite and to become more of an integrated software vendor and not just supply-chain monster" .i2 and Ariba partnered with IBM last year to form the B2B Alliance to target the market for online exchanges. Since then, analysts have been predicting a breakup between i2 and Ariba because the two vendors have consistently introduced software that encroaches upon each other's territory. The biggest evidence of that came last month when Ariba agreed to acquire Agile Software, a maker of software that helps companies share product information with their suppliers and partners. That brought Ariba into greater competition with i2, whose software, in part, competes with Agile's. "This makes a lot of sense for i2," said Bruce Richardson, an analyst with Boston-based AMR Research. "i2 gets an instant product that it can drop into its customer base on both the indirect and strategic sourcing side." "Ironically by waiting a year, they were able to get it for a fraction of Rightworks's market value a year ago," Richardson said. According Boston-based AMR Research, Rightworks closed 2000 with $36 million in revenue, a 1,700 percent increase over the year-earlier period. It also has a very strong pipeline that should allow it to at least double or triple revenue this year, AMR said. The customer base has also grown to about 70 customers, spread over a number of key industry sectors including financial services, healthcare, pharmaceuticals and high-tech. The Amazon Slasher - Ravi Suria is the latest in a string of analysts to achieve fame with predictions about Amazon.com. But Jeff Bezos isn't cheering him on. 5 March 2001, Industry Standard magazine, By Miguel Helft Now Amazon is being good to Ravi Suria, a 29-year-old analyst from Lehman Brothers. Until last summer, Suria was unknown outside the convertible bond market, a clubby and out-of-the-limelight corner of Wall Street investing. Now he's suddenly the analyst with the most penetrating insights into Amazon.
But Suria differs from many of his analyst colleagues in one big respect: He has made his name not by touting Amazon, but by shredding it to bits. His first report, in June, questioned the credit-worthiness of the company, leading investors to slash the value of Amazon's shares by nearly 20 percent in one day – a plunge from which they have not recovered. Amazon CEO Jeff Bezos, who rarely utters an unkind word in public, was quick to dismiss Suria's work as "complete, absolute, pure, unadulterated hogwash." To Amazon's chagrin, Suria's 15 minutes of fame are ticking on and on. On Feb. 5, Suria issued another stinging report; Amazon execs dismissed it as "silly," but they appear to recognize the power that Suria wields. But th e "publicity" take is complicated by the fact that Suria has shunned the traditional trappings of publicity seekers. After his June report became a sensation, CNBC anchor Maria Bartiromo tried to get Suria to go on the air, to no avail. Bartiromo, whose show is irresistible to most Wall Street analysts, says she used all her clout at Lehman, twisting the arms of Suria's bosses before he agreed to appear more than six months later.Suria grew up in Madras, India. In 1991, he received a bachelor's degree in instrumentation engineering at Annamalai University. A move to the United States brought him to the University of Toledo in Ohio, where he attended graduate school in engineering. Suria immediately went for a second graduate degree, an MBA at the A.B. Freeman School of Business at Tulane University in New Orleans. After graduation, Suria joined Paine Webber as an analyst of convertible bonds, a note that has a lower return rate than typical corporate bonds but that can be exchanged for stock; convertible bonds are often used by fast-growing new-economy companies. Suria's mix of engineering and finance training made him ideal for this type of work, Ricchiuti says. "He had better analytic skills than any students in his class," he adds. After making a name for himself at Paine Webber – winning a high ranking from Institutional Investor magazine – Lehman snagged him to head its convertibles research department. At Lehman, Suria has produced a staple of weighty research reports, many on the telecommunications industry, that have become a sort of serialized bible for convertible bond traders. "He turns out more research than anyone, and his publications are a must-read," says George Froley, chairman of Froley Revy Investment, one of the largest investment firms dedicated to convertibles. Other than one interview in the New York Post, in which he admitted to skydiving, playing squash and reading science fiction, he has shunned the limelight. Still, critics insist that some of his predictions tend toward the sensational. Suria's most recent indictment of Amazon came just days after the company announced it would turn an operating profit by the end of this year. In the February report, Suria now emphasizes working capital – that is, current cash and other assets minus current liabilities – as the key measure of Amazon's survivability, not cash on hand. Amazon's working capital has been decreasing steadily and will turn negative in the second half of the year, Suria says. That could trigger a "squeeze" by suppliers concerned about the company's ability to pay its bills. Amazon declines to get into the details of Suria's latest critique, but company execs maintain that he simply doesn't know what he's talking about. "You can't take this report seriously," says Amazon spokesman Bill Curry. But Amazon remains one of the most hotly debated firms on Wall Street, and Suria has plenty of fans. His primary role is to tell investors whether or not to invest in Amazon's convertible bonds, says Eric Von der Porten, who runs Leeward Investments, a hedge fund based in San Mateo, Calif. "His advice has been no, and on that count he's been absolutely right." Indeed, Amazon's key convertible bonds have dropped from about $75, when Suria wrote his first report, to about $40.If nothing else, Von der Porten adds, Suria has forced stock analysts who are often "smitten by the opportunity" in a company to do some detailed analysis. That's something that Blodget readily admits. "He has helped me think about several things in greater detail and in a different way than I would have thought about them," he says. But Blodget still disagrees with Suria's conclusion. "I think he's wrong," he says, "and I hope he is wrong." On 9 March, Money Daily reported that the Securities and Exchange Commission has questions about the timing of some stock sales by Amazon.com's Chairman, Jeff Bezos, according to the New York Times and Reuters on Friday. Bezos informed the SEC that he wanted to sell 800,000 shares worth at $12.2 million, on Feb. 2 and Feb 5, just before Lehman Brothers analyst Ravi Suria publicly released a dismal report challenging the company's ability to operate through the year. Amazon, which inched up 56 cents to $12.25 Friday, received the report a week before it went out to everybody else. The SEC wouldn't confirm or deny the report and Amazon said it wasn't aware of the investigation. |
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