First reader up this week writes:
“Just wanted to pass along my thanks to you for writing what I felt was a very well written article (Morning Report, June 7). I direct a media team for an interactive agency and will be sharing and discussing the topic of open vs. closed cable delivery in this week’s digital brainstorm session. Your article will be heavily discussed.”
Reply: The issue is a hot one and one that has a long way to go. I encourage you to look at it from every angle since each vantage has its pro and con. Ultimately, I am for value creation no matter what the wire or wireless.
High Speed
“Steve, hi, I am a recent subscriber. What do you think of HSAC?”
Reply: On one level I see High Speed Access Corp. (NASDAQ:HSAC) as a competitor to @Home. But according to HSAC’s president the firm actually wants to focus on being the connector or service installer for cable Internet and partnering with the @Homes and Road Runners of the world.
Overall, competing with @Home or Road Runner doesn’t seem like the best way to spend its $169 million raised from IPO last week. Although HSAC has Paul Allen behind it. Allen owns cable firm Charter Communications and has plans for a wired world.
With Allen I think HSAC has potential to be a player in cable Internet. There’s a long way to go though.
Network Solutions
“Would you please shed some light on NSOL stock? Network Solutions stock surged yesterday (currently up 5 points) on the news from competitor Register.com. What is the outlook for this stock going forward?”
Reply: I believe Network Solutions could benefit as the database keeper of domains, for which it receives payment to maintain the record on that level. Also, Network Solutions has years of experience in registration and a large lead in number of .com registrations that could make it difficult for upstarts to threaten it now. However, I also view NSOL as a company that has enjoyed a monopoly and now for the first time ever must be competitive. While it may be able to make the transition I foresee a period of adjusting for this firm in the short term. Long term outlook from my perspective looks favorable for NSOL if it can execute on its lead.
Telmex
“I have been following the recent news on Telmex (TMX) and Prodigy (PRGY). I guess what got me interested in recent weeks was the bond issue by Telmex. Telmex strives to build an Internet empire. Is this possible? Do they have the
capital to get the job done? I am looking for value in this sector and it seems hard to find!”
Reply: Telmex (NYSE:TMX) to me does represent an emerging player in global Internet. Why? Internet and telecom are becoming one and the same on some level as established telcos seek out growth.
Telmex is the largest phone company in Mexico and has considerable cash and clout, not only through its phone service but stakes in Prodigy (NASDAQ:PRGY), CDNow (NASDAQ:CDNW), cable and TV. As a play on the Hispanic Internet market Telmex looks like a player, followed by StarMedia (NASDAQ:STRM).
Internet Tigers
“Enjoy your perspective and read your column daily. Given Asian population at some point would expect to see explosive growth with the Net in that region. Looking at PCNTF & PSIX. Your thoughts please?”
Reply: The global market for Internet is opening up. It reminds me of the early 1990s in the U.S. I see infrastructure plays as important now and that would include both Pacific Internet (NASDAQ:PCNTF) and PSINet (NASDAQ:PSIX).
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