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Getting a Fair Share

<I>TSC</I> readers sound off on recent articles. publishes selected email received by the publication and its staff members. To send an email intended for publication in this section, write to and include your full name and city. Letters may be edited for length, style, clarity and accuracy.

Entitlement Issues

James Cramer

: In response to your column

Proprietary Research Isn't Shareware, this attitude doesn't shock or surprise me.

Almost 20 years ago, I operated a computer retail business and had an Ivy League university as a customer. I sold lots of hardware, but relatively little software, I'm sure you can figure out why! I had quite a few conversations with professors who honestly thought that "sharing" software was not the same as infringing the copyrights of the textbooks they authored. One unsuspecting professor who ordered several hundred dollars' worth of software called me later and said I cheated him because at the time he didn't know he could get it from one of his colleagues. Perhaps some of those asking you about the Lehman List are their students?

The software industry has resolved many of the "sharing" problems in industry and academia. No university would allow the type of software sharing that went on 20 years ago, and I'm sure the Internet industry will resolve the information entitlement issues you've described in your column.

-- Ed Zerdy

(received 6/29)

Amerindo Fund Suits Tax-Deferred Needs

Joe Bousquin

: In response to your article

Amerindo Technology Fund Warns of Huge Capital Gains, I don't mind. I'm in tax-deferred accounts. I actually seek out funds like


Amerindo. You think this publicity will make them change? This is the type of fund people like me would like to get into.

-- Jay Spence

(received 6/29)

Waiting for Nirvana

James Cramer

: In response to your column

The Nirvana Scenario, I agree that the double whammy uncertainty of a


increase Wednesday and the unemployment report Friday serves up too much risk to buy into this rally.

Assuming a 0.25% increase on Wednesday and a report on Friday that is consistent with expectations, my guess is that the market will sell off in anticipation of more increases. I think

Alan Greenspan

will get it right, as he always has. However, if the market discounts this and rallies, it may force him to be more aggressive.

-- Dan Calarco

(received 6/29)

Size Breeds Arrogance

Mavis Scanlon

: In response to your article

Legal Fight Between Rowan and BP Amoco Will Set a Precedent, I think we are starting to see the game plan from the mega-mergers. These companies are so big that they've become as arrogant as they please and break contracts if it suits them. There is both good and bad in this. We need the size of these companies to deal with the uncertain energy needs of the future. They have the financial strength to assume the risks associated with this uncertain future.

Unfortunately, it will be difficult for lots of companies, countries and industries to deal with these financial and technical giants. These companies need the management and negotiation skills to persuade countries where they invest to produce and improve the recovery from the best fields. This should be done before moving on to the difficult and more expensive fields. That would mean that someone within these giant companies should recognize the need for doing this. In my opinion, most of this knowledge has been retired early and will never be regained. These big companies will be tough negotiators, but not tough, intelligent negotiators. Will the consumer benefit from their ability to throw their weight around? Probably not. The companies will benefit, and in the present culture, that means the top managers will do very well.

-- Tim Nehrus

(received 6/27)

CMGI's Progeny

George Mannes

: In response to your article

AltaVista Could Be Big Traffic Booster for CMGI's Progeny, I can't help but feel that the article was walking the fine line between news and commentary. In fact, I felt as though I was reading a strategic marketing bulletin from




In the article, you point out several potential benefits for CMGI from the rumored purchase, yet these benefits are based on a strategy that you've laid out that is based on pure speculation. I was amazed to see you go into such speculative detail without any quotes or input from anyone at CMGI. As for negatives, you mention only one: potential conflict with



. I can think of a number of other negative aspects of the rumored deal that you don't even touch upon.

For instance, perhaps $2 billion to $3 billion is way too much to pay for


. How does one justify this from a future profit perspective?

Also, it will be a significant challenge in cross-company cooperation to attempt to build in the services from other CMGI-held companies into a single "portal" based on AltaVista, as your suggested strategy would require. Anyone who has ever lived through a joint venture or a merger might see potential problems here.

Lastly, you quote only two people in the article: an anonymous "buy-side analyst and holder of CMGI stock" and "an anonymous CMGI stockholder." Surely, there must be someone out there with no position in the stock who might have a negative view on this deal.

-- Eric Wells

(received 6/24)

George Mannes

: Thanks for knitting together a view of what may happen with some of the

most powerful players involved in the Web. I was amazed at the seeming lack of in-depth coverage of CMGI, Lycos,



, AltaVista and



by other "business" news sources. When I heard about CMGI's possible interest in Compaq's AltaVista, I wondered if Gateway would have any concerns. On the other hand, if AltaVista somehow plays into what Gateway needs, but becomes a better product through aggregation and evolving via CMGI, it makes a little more sense. I just can't see

David Wetherell

inking a huge deal with Compaq one day and holding hands with one of its biggest competitors the next week unless there is a thread somewhere.

Thanks for taking the coverage to the next step. Please keep us posted on how this might turn out. The pulp guys don't seem to have the time ... or the view that a deal like this can have such huge impact on how the "space" will ultimately be defined.

-- Ralph Aceti

(received 6/24)

Keeping Compaq's Downturn Quiet

Christopher Byron

: I enjoyed your article

Compaq's Downturn: Worthless Experts Just Kept It Quiet because this is the kind of reporting that will force analysts to be more honest in their company reports.

Investors should not be surprised about this earnings warning. In my walks through retail computer stores and warehouse-type stores in the last year, I have watched the prices of the boxes come down. The competition is fierce among the big names. Then there are the brand-name knockoffs by small-company boxmakers. I bought my retired dad one. It works great, and I got it at a wholesale price. As a friend of mine told me years ago, "The box name isn't what matters; it's what's inside. If it's got an


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processor and a

Western Digital

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hard drive, it doesn't matter what the box name is."

This is great for the consumers, but not so great if you're long on



. It wouldn't surprise me to see margins continue to erode, unless a lot of people buy into the notion that they have to have a Compaq, or a



or a


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and think they have to keep buying new boxes every two years because of increased processing speed or hard-drive capacity. I'm not long any boxmakers because I look for the best quality and the best price when shopping. I guess that makes me one of the margin-killers. Over the last few years between work and home, I've used Compaq, Gateway and


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. They are all quality machines.

-- Rich Wendt

(received 6/23)

Threat of the Net

Christopher Edmonds

: In response to your article

Retail REITs Feel the Threat of the Net , it was very interesting. The bricks-and-mortar guys are scared to death of the Net and are behind efforts to tax it. Remember, if you don't understand it, can't control it or can't compete with it, TAX IT! It may be possible that some of the REITs made a political contribution or two in their day; now it's payback time for the politicians.

At the risk of sounding like the


, think of the banks' and lenders' interest if the bricks-and-mortar retail guys continue to lose market share to the Net. Less building, lower rents, lower property values equal smaller profits and increased potential defaults. Do they have a reason to support a Net tax?

TheStreet Recommends

-- George Huhn

(received 6/23)

Christopher Edmonds

: I have a comment on your

column about REITs and the Net.

An interesting angle to pursue would be what REITs' Internet strategies/ideas actually are, particularly related to helping their tenants generate incremental sales. I suppose if a sale were generated through a link from a

Simon Property Group

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Web site, then it could be entitled to some percentage of rent.

Clearly the Internet will impact retail. Nobody really knows yet how much. But retail will also adjust, although some concepts and locations could suffer more than others.

-- Ross Weiner

(received 6/23)

Christopher Edmonds

: Your

column on the Net and REITs should have been written three years ago. What is happening was known then. Only now are money managers, retail property owners and lenders waking up to how online buying is going to impact retail space demand, rents and property values.

-- Mark Borsuk

(received 6/23)

Reaching the Cycle's Excess

Jeff Bronchick

: About your column

The Net Party Is Over, aren't you a little young to fall for the "reversion to the mean" stuff? Excesses always abound before the fall, it's true. But why are you so convinced we are anywhere close to excess? With world peace, the Internet and everyone speaking English (educated in the U.S. or by watching


), we have a long way to go to eliminate poverty before this cycle's excesses are reached.

That's my opinion, having lived through a couple of nasty ones.

-- Kenneth Metviner

(received 6/23)

History Will Prove Itself, Again

James Cramer

: In response to your column

Debunking the Barriers-to-Entry Myth , maybe I was old fashioned, too, even though I was exposed to the Internet back in 1993 (or 1994?) with Mosaic. I was very skeptical about the barrier-to-entry thing. It's the reason I never invested in


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or, for that matter, in




The Web puts a lot of power in a consumer's hands. If a vendor charges too much for a product, then someone can just start a competing service on the Web. All they need to do is buy a lot of Web advertising and instantly put the original company out of business. I can't understand why this hasn't happened yet. Of course, most of the Web companies are not making money yet.

Anyway, if only I had been smarter in 1993. I did have all kinds of ideas for content. I was just too lethargic to do anything about it.

-- David Haas

(received 6/22)

James Cramer

: I remember not so

long ago asking an ISP to rent space on its Web site. It was charging something like $50 per page for Web development. I told them that I wanted to create my own pages and asked how much it would cost per megabyte. The head technician laughed at me, saying that you can't rent Web space. He even commented about how naive and inexperienced I was.

I hate when people do that, especially when I know that I am right. Fortunately, they are now out of business. Capitalism works! History will prove itself again.

-- John Bardos

(received 6/22)

Moving New Money

Anne Kates Smith

: In response to your column

The Brains Behind Smart Fund Investing, I suggest that some of the "effect" mentioned is that, simply, new money is much easier to invest than trying to change present holdings that have a lot of psychological baggage attached.

This "new money" effect is often seen when new funds are started and the money manager has a clean slate. He or she will often choose investments that are currently "working" in the market and thus show superior initial performance.

-- Peter Irvine

(received 6/21)

New Gateways

Eric Moskowitz

: I enjoyed your article

Gateway Country Stores Silence Critics, Intrigue Others.



stores will further allow the company to build an IT service and support infrastructure for small businesses, a key distinguishing factor beyond the box.

Gateway suffers however from not having a strong presence in the corporate market, where most of the dollars are. Clearly its long-term survival depends on how well it can advance beyond the consumer and SOHO markets into the business space.


Deepinder Sahni

(received 6/22)

Eric Moskowitz

: I must admit, I haven't finished reading your

article on Gateway stores yet. After the second paragraph, I was inspired to write.

What made me stop reading was envisioning "The Apple Orchard" (or perhaps "The Apple Core"). It would be a colorful place with cool stuff and an enthusiastic staff. I bet your



employee would be psyched to wear a polo shirt with a little


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logo on the right breast. I envision a company with an integral history, making a limited number of great computer products and selling them directly via the Web and a growing number of well-placed and excellent stores. As the Internet is enabling companies that think fast to become more focused and productive, bricks and mortar can definitely enhance this process.


Steve Jobs

and company: Jump in with both feet! Now back to the column.


Phil Pearlman

(received 6/22)

Moving on Bad News

Joe Bousquin

: About your article

Jacob's Future With Internet Fund in Doubt After Sale Falls Through, this is absolutely devastating news. I really don't understand what the problem is here. It's unfortunate that we shareholders haven't been told why the

Lepercq, de Neuflize

deal fell through or why we are even in a situation where Ryan Jacob has to consider leaving.

I'll tell you this much, if Ryan Jacob leaves, then I'll redeem every last one of my 137.524 shares.


George Nichols

(received 6/22)

A Whole New Ballgame

Caroline Humer

: In response to your article

Hard-Pushing E*Trade Trades Up to a Different League, what I find most interesting and at the same time most troubling about this "online trading race" is that these firms are making some absolutely outrageous projections about the growth of Internet trading.

Most of these firms fail to understand that better than 90% of the retail traders in this world lose money. Add to that the insane volatility of stocks on a day-to-day basis, and it means the average guy is going broke more quickly. These firms will advertise that they have the state-of-the-art system for the daytrader. The truth is, most people who start point and clicking don't have a clue as to how to trade.

My gut feeling tells me that many of these firms will not have to worry about attracting more money from retail accounts because eventually most people will stop trading. I have really begun to believe that this is not a temporary aberration; this is the new trend. People are starting to get killed by online trading. These firms won't admit this, but they are readily aware that the turnover of accounts is what will allow them to survive. They probably have six months to a year for every active trader account. After that, they need to recruit new blood to keep the cycle going. Will this happen? That's the $64,000 question.


Peter M. Beckwith

(received 6/22)