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No. of Recommendations: 8
I haven't had time to turn out a response. But just to weigh in quickly most of these concerns qualify as not material - IMHO.

Insider selling -- Naveen is selling 1-2% of his shares. Dell, Gates, etc. all sell off their shares, all the time. Heck, Gate's founding partner sold off ALL OF HIS SHARES a few years ago (bad move on his part it turns out). This is not major inside selling. This is selling off a few shares to raise $50 million or so to allow his family to live in the luxury that his wealth deserves.

Re: Local content. INSP's network is being recruited by (1) all the Baby Bells (ie, the local Yellow Pages)and (2) merchant banks (ie, those banks who comprise Visa/Mastercard). INSP gets $5 per month from each merchant; this money is split with the recruiter of the merchant. Ie, INSP's merchants are recruited locally, via Mastercard and the Yellow Pages.

Valuation: INSP is growing faster than MSFT was at the relevant time; also the market is now aware of the staying power and explosive growth of technology whereas before it was largely under a Buffetonian perspective that technology was not enduring

With the GNET purchase INSP has dropped to around 40 x this years revenues, gained $350 million in cash, $10 million in profits, and a heck of a lot more cash flow. Valuation for INSP at this current time is much lower than it has been at any time since I have followed the company

As far as market share 88% of the domestic wireless market, 50% of the European (and hopefully growing) and 100% of Indian market (when one really develops) and attacking Asia and Australia.

In regard to INSP continuing to get $1-$3 per phone per month. Ask yourself this (back in 1986) "MSFT getting $30+ per computer, that'll never hold once their are a few million, or even tens of millions of computers out there." Is INSP another MSFT - I can't answer that question. What I can say is that they are positioning themselves in a manner which may enable them to become the OS for the wireless market - allah the next MSFT.

But INSP is more than this. They are building a company to be the entire web infrastructure from top to bottom to the home on any device. Merchants become dependent on INSP front-end platform, this platform is integrated with GNET's backend platform. Wireless carriers become dependent on INSP's front-end platform, integrated through all their web offerings, and their unprecedented (EBay like) merchant network; in addition these services, via GNET are integrated into the home following the wireless providers DSL business. A complete front to end solution from the initial web-site, to the wireless device, to the merchants back-office, to the DSL offerings of the wireless providers. One stop, integrated to the T, shopping. INSP's current market share bears this out.

How powerful this model will be we can only guess. How high the switching costs will be we can only guess. INSP is like Jim Morrison's obsession with "the other side" - we won't know until we get there. INSP is at that point. It looks GLORIOUS. But until you make that plunge and can actually see what is on the other side we JUST CAN'T KNOW. Treat it accordingly. Huge, glorious upside potential, evidence pointing to a good liklihood of this upside, but also high risk. Like Warren Buffett I like to buy them low and bet big. That is my style and is what I have done, as I have done with all my major purchases. Treat INSP accordingly with your own risk tolerances.

Tinker
P.S. in regard to m-commerce, all you need is a small percentage of the total pie to be enormously successful. And INSP has some "mundane" patents which make this shopping far more pleasant

P.P.S. In reagrd to the coupon example. Their is a misunderstanding. INSP's couponing technology (patented) does not use the cell phone as payment. Instead you pay as usual with your credit card and the rebate is automatically credited to your account without the merchant even being aware of it at the time. You pay the full bill up-front and get the discount on the back-end (allah, don't worry about getting poor service because your using a coupon).

au revoir
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