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From the Bandwagon,
The correct GG strategy would be to buy a basket of wireless
infrastructure players: PUMA, INSP, AETH and PHCM (can substitute GNET and SWCM to get the
merger/arbritage premiums). IMO PUMA and PHCM are the Gorilla Game candidates, while INSP and
AETH are really Godzilla Game players.

http://boards.fool.com/Message.asp?mid=13197468

Is this the consensus?

ab
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No. of Recommendations: 2
Hi ab (jeffbarson):

You wrote (quoting me <<here>>):
"From the Bandwagon,
<<The correct GG strategy would be to buy a basket of wireless infrastructure players: PUMA, INSP, AETH and PHCM (can substitute GNET and SWCM to get the merger/arbritage premiums). IMO PUMA and PHCM are the Gorilla Game candidates, while INSP and AETH are really Godzilla Game players.>>
http://boards.fool.com/Message.asp?mid=13197468
Is this the consensus?"


No, that is just one person's opinion, namely mine.

IMO, PUMA is involved in a Gorilla Game, early in the bowling alley stage. IMO, the safest route to take at this time is to buy a basket containing the leading companies in the wireless software sector. Again, IMO, these leading companies are INSP, PHCM, AETH and PUMA. I am not following that strategy, I only own shares of PUMA, because I think they have the best technology (forming the basis of an open proprietary architecture), a very strong value chain (partners and customers include NTTDocomo, Nokia, Palm, Symbian/Psion), as their software gets integrated by wireless carriers their barriers to entry and switching costs increase. Their MAP software IMO represents a discontinuous innovation, one of the components, Browse-It™, turns html into wml allowing web sites to be displayed on wireless devices without using a third party web site (such as Infospace's wireless portal that aggregates content). The tornado in 3G is only a few quarters away, PUMA is growing its core business at a better than 80% year over year in its core business (last quarter's numbers), and that is expected to shoot up as the 3G rollout gets underway in earnest.

Just remember, this is just my opinion, and I do have a long position in PUMA.

-xerohype

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No. of Recommendations: 5
PHCM is in a royalty game. Phone.com doesn't not own WAP. It's an open standard. There will be no gorilla in the WAP browser or gateway space.

Browse-It™, turns html into wml allowing web sites to be displayed on wireless devices without using a third party web site (such as Infospace's wireless portal that aggregates content).

I don't see Browse-It™, replacing Infospace. The carriers don't want their users going off to third party web sites. They want their users staying on their WAP websites much like Aol has done with their service. Infospace provides content, services, and technology to the carriers to allow them to make wireless web happen (ie getting promotions, get stock quotes, email, finding the nearest ATM, ect..). Infospace basically provides a portal in a box. The carriers don't want their users going off to Yahoo for email, stock quotes, ect.. Infospace get a licenses fee from the carrier and also gets 5 to 25% of any transaction. So if Joe Bob's car shop runs a promotion and you go in a buy something. Infospace gets a nice piece of the transaction. So does the carrier. This is why Infospace is working on adding more merchants to their merchant services. So far they have 2M merchants. The more merchants INSP has the more promotions that can be run across INSP affiliates. The more promotions means the more likely a carrier will want to go with Infospace. There are over 10M merchants in the United States doing over 3.7 trillion in commerce.

If the users go off to another portal (Excite), it makes the carriers just that dumb pipe. Over time, it's possible that the wireless portal will be worth more than the pipe itself, hence, many of the carriers will be more than happy to partner with Infospace to get access to INSP platform. Instead, i see Browse-It™ and Infospace working together or coexisting. Infospace will provide the wireless portal and be the Yahoo of wireless web, while, Browse-It™ will allow users to acess other websites not formated for WAP or other third party websites.


Infospace solution allows users to customize what they see on their cell phone from their computers. Since
it's easier to impute data on the computer, you can set up your portfolio on the PC and then access your
portfolio from your phone.
http://www.infospace.com/_1_4JN9TF403ODLG2N__gtenet/welcome.htm
http://www.infospace.com/_1_4M3EURT048HEUME__info.airtc/welcome.htm


PUMA's value chain is very strong, with such partners and customers as NOK, PALM, NTTDocomo, its software works with all the major wireless platforms iMode, PALM, Symbian/Psion, etc

So it Infospaces. AT&T Wireless, GTE, SBC, ALLTEL, VoiceStream, AirTouch, Verizon. Infospace claims 88% market share in the United States. Around 50% share in Europe. Infospace will make roughly 1-3 dollars per user per month.

Here are some other links that talk about INSP competitive advantages.
http://boards.fool.com/Message.asp?id=1380180001215000&sort=id
http://boards.fool.com/Message.asp?id=1380180001215004&sort=id
http://www.tsrec.com/infostructure.html
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No. of Recommendations: 11
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.

Tinker

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Hi scrim1:

"PHCM is in a royalty game. Phone.com doesn't not own WAP. It's an open standard. There will be no gorilla in the WAP browser or gateway space."


Let me make it clear that I'm not talking about anybody owning the WAP standards, I'm talking about an applications Gorilla Game developing, although very early in the bowling alley. When I refer to PUMA as being in a gorilla game, I'm talking the same type of game that Microsoft enjoys with Office, not the one it enjoys with the Windows OS. PALM is in that kind of GG where it does control the OS in the PDA market. Besides, PUMA also offers some great features with their Mind-It™ and Synch-It™ products, their integration of all of these offers a lot of promise, and PUMA is also unveiling their own protal to complement their software offerings. I do think though that Infospace leads the race at this moment, no questions about it, the question is seeing into the future.

"I don't see Browse-It™, replacing Infospace. The carriers don't want their users going off to third party web sites. They want their users staying on their WAP websites much like Aol has done with their service. Infospace provides content, services, and technology to the carriers to allow them to make wireless web happen (ie getting promotions, get stock quotes, email, finding the nearest ATM, ect..). Infospace basically provides a portal in a box. The carriers don't want their users going off to Yahoo for email, stock quotes, ect.."


Let me say that that's where the DI part comes in for PUMA. As a consumer I would rather have access to the whole web, not just one portion of it pre-packaged by INSP. PUMA plans on distributing its software widely. What's to stop me from bypassing Infospace? Now, I don't think that Infospace will be replaced by PUMA's software. Infospace, like AOL before it will survive and do very well, IMHO.

You didn't have to show me all those links for INSP, I am very aware of their awesome presence in wireless, just look at this post I made in the KP board the other day:
http://boards.fool.com/Message.asp?mid=13236412

I also just responded with a long-winded message comparing AETH and PUMA in Rat's board:
http://boards.fool.com/Message.asp?mid=13239667

As I've said before, the real GG way to play this sector is to buy a basket of companies to include: PUMA, AETH, PHCM and INSP. INSP now has a market cap of more than $9 Billion compared to PUMA's $1 Billion:
http://quote.yahoo.com/q?s=PUMA%2C+INSP&d=t
The risk is definitley higher for PUMA (so is the upside), and the game is in a very early stage.

Thanks for the comments. They are appreciated.

-xerohype
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xerohype,

The carriers don't want their users going off to third party web sites. They want their users staying on their WAP websites much like Aol has done with their service.

As a consumer I would rather have access to the whole web, not just one portion of it pre-packaged by INSP.


I'm glad you came back with your last sentence, because I was about to cry, "Who cares what the carriers want? I want to have access to everything the way I want it, not their way."

To me that's what will make this acceptable or not. AOL's 20 million accounts or not, I would think they are only a fraction of all the people that's on the web, isn't it? And I'll bet they don't know or care much about the way the 20 million AOL users have to use their internet access.

Harry
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Let me say that that's where the DI part comes in for PUMA. As a consumer I would rather have access to the whole web, not just one portion of it pre-packaged by INSP.

I don't think the carriers are going to stop you from accessing other third party websites. Just like Aol hasn't stop their users from accessing Excite games instead of paying a monthly fee to play games over Aol. The carriers want their users to use services from them. When you want a stock quote. The carriers rather you get it from them. If you want to find the nearest Italian restaurant. They want you to use them. If you want to send a email. They rather you use their services instead of using Yahoo.

Now say your looking for some type of ramdon information that isn't found on a portal. Browse-It™ would be helpful.

Say you wanted to check your bid on eBay. Browse-It™ could render eBay's website to work on your cell phone.

I'm not sure i see how Browse-It™ competes with Infospace. Browse-It™ is a browser. Like Netscape Communicator, right?

It seems Browse-It™ is more of a DI to Phone.com's browser.

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No. of Recommendations: 1
I'm glad you came back with your last sentence, because I was about to cry, "Who cares what the carriers want? I want to have access to everything the way I want it, not their way."

Infospace has technology that allows wireless web users check their Yahoo email with-out going to Yahoo.

http://www.quicken.com/investments/news/story/pr/?story=/news/stories/pr/20000724/SFM127A.htm&symbol=INSP

I'm not sure, but in Europe i think the carriers have been pretty successful getting wireless web users to
user their portals. When you turn on your cell phone the first screen you'll see is the carrier's portal.
People might find it easier just using the carriers portal, than using the wireless portal from Yahoo or
Excite.

It's still too early to decide who the winner will be. The portals obviously think they will be the winner in
the wireless portal space. I can understand why (they have the relationship with the consumer). However, it's the carriers who have the power. They decide what the user sees and what he doesn't see.
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Hi again scrim1:

"They rather you use their services instead of using Yahoo."

That's true, but then again look at ATHM with its Excite portal ( I own some ATHM - yuck!). PUMA's plan is to put together their software platform (MAP) and integrate it with their portal Intellisynch.com. MAP includes software to browse the web, get reminders and alerts (Mind-It™) and also data synchronization (Synch-It™). The Intellisynch.com portal will compete somewhat with INSP, but probably not that directly.

"Say you wanted to check your bid on eBay. Browse-It™ could render eBay's website to work on your cell phone."

PUMA already has an arrangement with Ebay to provide alerts in wireless devices. Let's say to warn you that the auction is ending and your bid has been beaten.

PUMA is way out in front in Japan with NTTDocomo and also with Japan's second carrier. NTTDcomo's sales force is helping PUMA sell its software for enterprise customers. As you know Japan is way ahead in terms of wireless data usage as compared to the U.S.

"I'm not sure i see how Browse-It™ competes with Infospace. Browse-It™ is a browser. Like Netscape Communicator, right?"

INSP and PUMA are playing different games and their technologies can be complementary to each other. This is not a zero-sum game.

Now, Netscape was a gorilla, until Microsoft used its gorilla (and according to DOJ, monopoly) power to crush them. Netscape would have controlled the browser market, but you know what happened there.

"It seems Browse-It™ is more of a DI to Phone.com's browser."

Yes, but if you can easily bypass Infospace's portal using Browse-It™, then you are short-circuiting Infospace's model.

The market is in its early stages, if I knew for sure who would win, that's where I would put my money, but alas my crystal ball is in the shop. Barring the crystal ball, the basket approach makes a lot of sense.

Cheers.

-xerohype

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To Tinker
In response to your patent reply. The most important point or advantage to having a patent is to inforce your patent rights. Otherwise, it is just "wallpaper". One thing to remember is that under the US patent laws, an issued patent is considered valid by the courts and it is up to the infringer to prove otherwise.
Daniel
p.s.
you got some great posts.
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Since we see a delay in the roll out of 3G (Tinker believes QCOM is still in the chasm), wouldn't it be too early to buy into these companies as well?
Just wondering...

A beginner investor.
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No. of Recommendations: 2
Hi kbzd:

You wrote:
"Since we see a delay in the roll out of 3G (Tinker believes QCOM is still in the chasm), wouldn't it be too early to buy into these companies as well?
Just wondering..."


Very good question. I do believe that the move to wireless data services is in the bowling alley right now with a tornado in earnest coming in about 4-6 quarters from now. One or more than one of these companies (INSP, AETH, PUMA and PHCM) should do very well as long term investments. Buying now entails a fair amount of risk, since this technology sector is still in its infancy. The real question is how much risk are you willing to take, by buying a basket of companies you are cutting down some of that risk, but there is the possibility that the leader in this sector has not even had its IPO yet or otherwise could be a company not within those 4.

With larger risks come potentially larger returns. If you wait until the tornado is well underway your risks will be cut, but so will your returns.

"A beginner investor."

Make sure you read the Gorilla Game book and Inside the Tornado, both of these books do an excellent job of explaining the technology adoption cycle.
(See the FAQ for details)

Good luck.

-xerohype


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