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In The Eye Of The Beholder...by Tin-redzero

The past few months would have been very discouraging for a VDOT long had all one done was to have focused his/her eyes on VDOT's stock price. Fortunately, most investors eventually realise that in the wise words of Warren Buffet, "The key to investing is not how much an industry (or company) will affect society or grow, but rather its competitive advantage and the durability of that advantage."

Keeping an eye trained on VirtualSeller's advantages often times seems more like a lesson in futility than one in gaining insight. For a company so young, so "tiny", you would think this would be a walk in the park. It isn't. Why?

Much of what VirtualSellers is about, not only currently, but also as it leans into the future, has been/is evolving, cutting edge and innovative. Take its cornerstone product for example: TAME.

TAME's competitive advantage is derived from its ease of programming and deployment, its scalability and flexibility, and its extensive ability to be customized. TAME is also fully compatible with XML, which is quickly becoming the de facto standard for electronic business information. (Annual report, pg 6) But it does not end there.

I know, if some of you, like me, were to dig deeper into TAME's abilities, you would quickly become lost in the programmer's jungle. TAME's "competitive advantage" gets lost in the hi-tech mumble jumble. There's an easier way to decipher and to remember the code. Plant this seed deep in your mind, "EXTENSIVE ABILITY TO BE CUSTOMIZED", for therein lies the key to just one of VirtualSellers competitive advantages and, more importantly, the durability of that advantage. Dr. Sinclair could not have said it more profoundly: "We want to make this (TAME) work on everything." Are they succeeding?

By all accounts, yes! The VirtualSeller's team has taken what was once considered a so-so shopping cart (1) and developed it into a program which established a common interface for web browsers (2), given it a dynamic Web page engine (3), deployed TAME software into the Web portal and wireless vendor markets (4), introduced the TAME Application Server (5) turned TAME into a toolkit which implements all of the mathematical functions (MXML)- the first company to do so! (6), and are planning on releasing their OWN Simple Object Access Protocol application (SOAP) within the next year. (7)

Not happy with a company which has but single faceted durability? Neither am I. So I've also tucked this next phrase securely into my mind: "VirtualSellers.com has lodged itself in the niche of indispensable shepherd of the bottom line." (8)

Try naming a company (excluding non-profit) which does not operate with its bottom line in mind. Can't think of any? Can you think of a company who operates with ANOTHER company's bottom line in mind? No? Try 'VirtualSellers'.

Their adopted business model is known as the metamediary -- a business that brings buyers and sellers together in a central marketplace and provides transaction services such as financial settlement and quality assurance -- almost a definition of VirtualSellers.com. (10)

It's obvious the business model VirtualSellers operates under is succeeding for they continue to sign up new clients on a daily basis, some of which are household names. (11) But, does this business model meet the criterian of durability? That question, I believe, can best be answered with another question. If you were the CEO of a company, who would you trust your bottom line to; a company who has only their own interests at heart and wants to sell you services and software? Or a company, by virtue of its business/client relationship, can only make money and survive as long as its clients make money?

Now in order for VirtualSellers to insure their own livelihood by making sure their client companies make money, they have had to build their own infrastructure. They've done this in the past year by forming partnerships with EMC, ROK, MOT, and others and by investing in hardware, software, and wetware through acquisitions, bartering, and purchases. This has cost them time and money, but they have built a platform of e-business solutions which provide businesses with savings over their competitors by reducing their client's costs of developing or improving their e-business/e-commerce presence on the Internet and their cost of doing business with their customers and suppliers. (12)

Are the products and services of VirtualSellers absolutely necessary for the survival of their client businesses? Probably not. But are the products and services VirtualSellers offers necessary for their clients to thrive? Yes! This investor believes so. For a company to maintain a competitive advantage, it must not just survive, it must thrive, and in order to do that, it must be equipped with the best e-business/e-commerce solution available. Their own durability depends on it.

(1)http://www.goldpaint.com/examples/manual/basics.htm#customers_tracked
(2) http://www.applelinks.com/articles/1999/12/19991223132308.shtml
(3) PR, Dec. 10, 1999
(4) CPR, March 31, 2000
(5) CPR, April 18, 2000
(6) http://zonaresearch.com/deliverables/quinielas/index.htm
(7) Annual Report, pg 3
(8) http://thomsoninvest.ragingbull.com/mboard/boards.cgi?board=VDOT&read=62411
(9) http://www.chicago.tribune.com/news/metro/northwest/article/0,2669,SAV-0005010048,FF.html
(10) http://www.webimprovement.com/cgi-bin/directory/search.cgi?Terms=virtualsellers&howmuch=ALL&Range=All
(11) CPR, April 24, 2000 & CPR, June 21, 2000
(12) Annual Report, pg



(Voluntary Disclosure: Position- Long; ST Rating- Strong Buy; LT Rating- Strong Buy)