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Subject:  Re: PUMA, INSP, AETH and PHCM Date:  9/3/2000  3:35 PM
Author:  TinkerShaw Number:  4115 of 8783

I'd just like to add another point about INSP and then a few words on PHCM (which Rat has "pestered";) me into checking out this weekend)

INSP has another patent that has been the joke of the business press. It is a patent on tracking a referral from a web-site to the eventual purchase.

I have seen at least three stories in the press that include this patent as "bogus" and part of the business process patent abuse. These journalists, and I'm gonna be honest here and to the point, okay I'll tone it down a bit too, they just are not very sharp.

The value of this patent, and the complexity of making it work are enormous. If someone responds to an ad on your sight, whether it is immediately, or a few days later, and you can track that, you have an invaluable service and product for both (1) the merchant and (2) the web-site owner. The merchant gets accountability for his advertising effectiveness (Accountability that even DCLK cannot provide today) and the web-site owner (including the telecomm wireless portals) get a cut of the revenue. Revenue which is automatically collected by the merchant banks and forwarded to INSP via use of GNET's and INSP's proprietary billing software. Which is then shared with the web-site owner.

Then perhaps I'm delusional. Perhaps their is no value nor invention with being able to do this. Most likely I'm daff and the popular press is right on point again.;) (note the smirk!)

Anyways, on to PHCM. I spent last night getting to know this company. At first glance PHCM has established itself to be the next great and dominant Gorilla -- bar none. But that is at first glance.

PHCM is embedded in 65% of the WAP enabled handsets, 60% of the carrier backend, and over 100,000 WAP developers have arisen from just over 2000 last year. Yes, with these stats this is Microsoft all over again. AT FIRST GLANCE.

Second glance reveals the flaw, and it will be up to you all to figure out how important it is: WAP is not a proprietary standard. Nokia can and does embed their browsers and they will work seemlessly with PHCM's back end services. Likewise Nokia or MSFT can create back-end software and this will work seemlessly with PHCM's handset browsers. So it is the Netscape model. Or is it?

The key is that PHCM is embedded in 60% of the WAP telecommunication infrastructure. And their software is proprietary. Just what are the switching costs of trading out PHCM server software for MSFT or Nokia. This will be the key to judging if PHCM becomes a Gorilla. And I just don't know the answer to this question.

If PHCM can retain this grasp their business model is lucrative. They currently get $9 per activated WAP service handset. There are about 4 million of those now. 100% sequential growth. You can do the math for how many there should be over the coming few years. IF PHCM's embedded software can give them the lock, there is no telling where they might go.

COMPARATIVE CONCLUSION: Even with Phone.coms business model of $9 per activated phone it is still less lucrative than INSP's model. INSP gets $-$3 per month, or up to $36 per year for each activated web-enabled service handset. And this is reoccurring each year, month after month after month. And this does not include the advertising or commerce revenue.

PHCM on the other hand gets a one-time $9 fee per phone.

Both very, very, lucrative. And both have enormous upside. But for those looking to get in some DD these are the basics between the two.


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