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Date Posted: 09:24:09 01/03/00 Mon
Author: Patty
Subject: Re: STRM info...from Mark Johnson's news letter...
In reply to: warren 's message, "STRM info...from Mark Johnson's news letter..." on 06:34:20 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."

Warren, Thank you for the great info. I do like STRM a lot and have for quite some time. They are well positioned in Brazil where I think they will beat out AOL, and this was confirmed in an obscure article I read in some little magazine. It's funny that in the same article they also mention NBCI which is not very loved at the moment, but will be.

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