NetCurrents (fka NTCS)

[PappaJohn]

The Street.com mentions NetCurrents

http://www.thestreet.com/_yahoo/funds/strategies/1112584.html

Searching For the Killer App of the Coming Wireless World
By John Rubino
Special to TheStreet.com
10/6/00 11:09 AM ET




We can argue about the timing, but not the result: Someday soon the world will be mostly wireless. One study, for instance, has the number of Internet-capable cell phones exceeding the number of PCs by 2003. Another puts unit sales of cell phone/personal digit assistant hybrids at better than 300 million a year by 2005.

That's good news for the handset makers, but because it's common knowledge you have to figure that it's already priced into their stocks.

The real action is in applications, i.e., the wireless services that road warriors will pay to use. Right now, everyone with Web content is adapting it to fit those tiny handheld device screens (for more on this, see my Sept. 8 column ). But it's not yet clear which app will end up as standard equipment on every device and turn its makers into instant giants. Some, like stock trading, are obvious winners, though it's hard to imagine any one broker dominating. Location tech, which tells you (and nearby merchants) where you are, is another good bet. (A column on those stocks is in the works.)

Customized intelligence gathering also will be hot. Check out NetCurrents (NTCS:Nasdaq - news), for example, which uses an expert system to scan the Web for information about a given company and cooks the result down to a graphic representation of investor sentiment. Click on any part of the graph, and you pull up the most recent posts on the major message boards.

Why is this valuable? Ask the people running Emulex (EMLX:Nasdaq - news). A few weeks back, a fake highly negative press release was posted on one of its message boards, panicking investors and shaving $2.5 billion from the company's market cap in a matter of hours. The post happened before the stock markets opened at 9:30 a.m. EDT, and Emulex didn't respond until 10:20 a.m.

NetCurrents' service, says CEO Irwin Meyer, would have alerted Emulex managers to the post almost immediately, allowing them to halt trading in their stock and to correct the record, stopping the panic before it had a chance to snowball.

Within two weeks, promises Meyer, his service will go wireless: "If you're on a plane, we'll be able to notify you immediately if something is amiss with your stock."

You have to think that this or something like it will soon be standard equipment on every control-freak manager's PalmPilot. But as Apple Computer (AAPL:Nasdaq - news) investors just discovered, a great product doesn't necessarily equal a great stock. Lately the market's perception of NetCurrents has been way negative, as its stock has fallen by more than 90% in six months, to just a little over a buck a share.

But in this case, reality is better than the perception, says Meyer. "Our operating trends are all positive. ... We have virtually no liabilities and enough working capital to last us 10 months." Besides, he adds, "We're always being offered money."

Another thing most of us will want on our handhelds is call management software, which InfoInterActive (IIAA:Nasdaq - news) is pioneering. This is one of my few remaining long positions, so keep that potential conflict in mind as you read on.

For a few bucks a month, InfoInterActive notifies you when a call comes in over the line you're using to access the Internet, allowing you to answer, ignore or send it to one of several voice mailboxes.

The service has been licensed by some big-name telcos, including Verizon (VZ:NYSE - news) and Sprint Canada, which led to some optimistic growth forecasts for 2000. These haven't panned out, and the stock has settled into a narrow trading range on extremely low volume.

But there are reasons to expect better things in 2001. First, the Verizon deal, which will give InfoInterActive access to around 5 million of the Baby Bell's customers, hasn't kicked in yet. When it does, in the first quarter of next year, it should produce a nice jump in subscribers.

Second, and potentially more important, is a recent linkup with Intel (INTC:Nasdaq - news), which bought a piece of the company and chose it to supply the call management capabilities for the chip giant's new line of information appliances. These will start shipping in the first quarter, with Intel predicting annual unit sales in the high six figures.

And a few days ago InfoInterActive released what it says is the first wireless call management application. Though this early version has a lot of limitations, it does let someone trading stocks on a Web-enabled phone know when a call comes in and then handles it for them.

Now for the final piece of this puzzle: According to a source at Intel, one of the reasons it bought into InfoInterActive was that the latter holds what looks to be defensible patents on Internet call management.

InfoInterActive hasn't chosen to defend the patents from the other companies offering such services because, says CEO Bill McMullen, "As a small company in a space typically dominated by the Nortels (NT:NYSE - news) and Lucents (LU:NYSE - news), we didn't think it would be wise to start by suing everyone. ... That's not to say that we won't ever start fights over these things."

Cool stories, these. But not sure things by any means. Both of these companies are tiny, untested and on the bleeding edge of businesses that barely exist at the moment. So be careful here. Don't bet big on either until they're clearly gaining traction.



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John Rubino, a former equity and bond analyst, is a frequent contributor to Individual Investor, Your Money and Consumers Digest. His first book, Main Street, Not Wall Street, was published by William Morrow in 1998. At time of publication he was long InfoInterActive, though positions can change at anytime. While Rubino cannot provide investment advice or recommendations, he invites your feedback at [e-mail].