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Date Posted: 06:34:20 01/03/00 Mon
Author: warren
Subject: STRM info...from Mark Johnson's news letter...
In reply to: Patty 's message, "Unfortunately Harmon's picks are already up up and away" on 06:18:04 01/03/00 Mon

> But I might try some side plays, STRM seems to move
> whenever PCNTF & TRRA move. NBCI will most likely move
> with CNET since they own them. That's all for now. I
> have cobwebs on my brain from too much festivity over
> the past two weeks.

Ryan Jacob, former star of the Internet Fund, produced
a staggering return of 196 percent in 1998. He now
runs his own firm called Jacob Asset Management and
his flagship product is the Jacob Internet Fund.

The Jacob Internet Fund started in the beginning
of December and raised close to $150 million. One
of the goals of this new fund is to be the premier
advisory firm focusing on Internet-related
investments. The new fund is focusing 100 percent
of its efforts on the Internet area.

When Ryan was asked if he anticipates a shakeup in
the Internet space, he said he thinks there will be
one. Ryan is anticipating changes, particularly in
the ecommerce names, because Internet retailers are
counting on fourth-quarter sales "to carry them
through the next year." He admits that it is
difficult to predict what will happen in the Internet
area in the short term. His fund is positioned for
long-term appreciation and "we ride out the bumps
the best we can."

The Jacob Internet Fund is not investing in many of
the well-known Internet names including America
Online and Yahoo!. Given those two names have
appreciated substantially in 1999, he feels their
upside is somewhat limited because they have become
so large. He states, "They are very successful
companies in their given niches and will continue
to be for the next five to 10 years. Unfortunately,
as an investor we just don't feel that we have the
kind of upside available to us as we might find in
some of the small- to mid-size Internet companies."

Ryan's fund is heavily weighted toward media and
content companies. Those companies, he points out,
require "long lead times" before reaching critical
mass. "Once these companies do reach critical mass,
they will start to show earnings. In many cases,
this is two to three years away. We believe these
properties, once they are able to gain this type of
scale, will have built very valuable franchises.

One of Jacob's favorite holdings is NBC Internet
(NBCI 77), which is the former Xoom.com and Snap.com,
including a few General Electric Internet properties.
NBCI is NBC's attempt to build a horizontal portal
to compete with other portals including: Yahoo!,
Excite and Lycos. "We think that with the backing
of NBC and being part of their family, they have a
great opportunity to establish a leadership position,"
he explains.

Another name he is positive on is StarMedia
(STRM 40 1/4), which is one of the largest Latin
American portals and similar to the major U.S.
portals. "StarMedia has a very strong presence in
Central and South America. They were an early mover
in those markets so they really have established a
great deal with brand identity. Outside the U.S.,
we are going to see many of these foreign markets
drive the growth of Internet usage and we think
StarMedia is exceptionally well-positioned."

Ryan has invested in the B2B (Business-To-Business)
space but notes that investor enthusiasm has made
that space very rich. One name he does own in that
space is Ask Jeeves (ASKJ 110) which provides consumer
and corporate question and answering services. Ask
Jeeves allows businesses to cut down on expensive
customer service costs by utilizing an Internet
solution. "Ask Jeeves is well-positioned to continue
to add new ecommerce companies on the Web as well as
other service companies to answer questions via
computer. It will save a tremendous amount in costs
on the customer-service side."

Two larger companies Jacob is bullish on are eBay
(EBAY 135) and Priceline.com (PCLN 46 3/4). He likes
those two companies because they provide unique
solutions for buyers and sellers to meet through the
Internet. Priceline.com allows businesses to sell off
existing inventory of perishable items including
airline seats, hotel rooms and rental cars, and the
company has been able to move into other areas such
as home mortgages, automobiles and, most recently,
groceries. "It is a very leveragable model." Jacob
points out that both of those companies are unique
and would not exist if there was no Internet.

Ryan is somewhat cautious about the B2B and networking
stocks because of their tremendous runs. "While a lot
of these companies are exceptionally positioned, the
valuations will probably be tough to maintain."

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