|
|
Enron Mail |
===================================
from Gilder Publishing THE FRIDAY LETTER e-mailed weekly, for friends and subscribers =================================== | http://www.gilder.com/ | Issue 30.0/October 19, 2001 HEADLINES: * The Week/ GX's sell-by date * Friday Feature/ Go Googly * Friday Bonus/ Free Words * Friday Bonus 2/ Internet Taxation * Friday Bonus 3/ Network Centric Warfare * Poll Question/ Ground Troops? * Readings * Conference Calendar * Subscribe / Unsubscribe Information TAKE PRIDE IN AMERICA Own a decorative masterpiece that represents pride in America - an authentic 1933 replica of the Constitution of the United States of America. As a master lithographer, H. Fuller Atwood dreamed about making the Constitution of the United States a beautiful work of art, as well as a living document for our country. There's only a limited number left of these unique Constitution Lithographs. Gilder Publishing proudly brings you this rare opportunity. Find out more about these rare masterpieces and how you can show pride in America. To find out more, call 1-800-720-1112 x2101 or go to http://www.gilder.com/constitution/ ~~~~~~~~~~~~~~~~ THE WEEK/ GX's sell-by date "Global Crossing probably has two years left to prove that it commands a potentially thriving business. The company now has just short of $8 billion in debt and $2.4 billion in cash, including the $1.7 billion line of credit the company drew down this summer. In this, the last year of the network build-out, it will spend another $1 billion on cap-ex in the fourth quarter, plus make interest payments of approximately $150 million. Assuming the worst possible case, zero EBITDA in the fourth quarter, and no IRU swaps at all to lay off some of the cap-ex, GX would end the year with $1.25 billion in cash. "With completion of the network, next year's cap-ex budget drops some 70 percent to only $1.25 billion, which is approximately equal to cash on hand at the beginning of the year, in this worst case scenario. But unlike this year's cap-ex budget, much of next year's is variable, consisting of the labor and equipment needed to light up lambda capacity for immediate sale, or to provide Internet services. No sales, no cap-ex, or at least a lot less. In addition, the company needs to come up with $600 million in interest payments. How daunting is this? "Last year, recurring adjusted EBITDA was $1.5 billion. In the first half of 2001 alone, GX sold $1.1 billion in IRUs at margins around 70 percent. Even in the disastrous third quarter, GX sold $250 million in IRUs. Next year it could make its interest payments and get through the year even if the entire business -- IRUs and all -- should shrink by 75 percent in the face of still booming Internet traffic. Forbes and the market are assuming World War III. But with World War III, Global Crossing could cut out half its cap-ex and pile up cash by selling assets. Planned asset sales, including IPC and Global Marine, the undersea cable laying group, for which there are already buyers lining up, should produce somewhere between $750 million and $1 billion, leaving GX's cash position at the beginning of 2003 better than 2002. "Ultimately, for GX to succeed, IRU sales must come back and the global Internet services business must take off, with GX winning contracts from Forbes 1,000 customers as the primary or secondary carrier, not just a few goodwill gambits tossed to the new kid on the block. Grim as it seems now, the IRU sales side is the most likely place for good news next year, in part because the Internet business, while growing 100 percent a year is still relatively small. Expecting total traffic growth of 75 percent this year, the world's carriers built their inventories accordingly a year or more ago. The recession intervened, overall traffic growth was closer to 50 percent, inventories clogged, carriers did everything possible to cut costs, and IRU sales fell off a cliff. "Today, however, most major carriers are running their networks at 50 percent of capacity or more. This rate is much too high for comfort for the bursty Internet data that is the target of Global Crossing's IP network. The Internet today is around 20 percent of the total growing four times faster than the rest of the business. But in the telopolies the bandwidth buyers are still playing chicken, looking for bargains from next generation carrier sellers desperate for revenue. Sellers, including GX last quarter, have begun to say no. Even with "modest" 50 percent a year traffic growth, the sellers that survive must eventually have their way, almost certainly before the end of next year." From the Gilder Technology Report, posted today for subscribers at http://www.gildertech.com/ =-=-=-=-=-=-=-=-=-=-==-=-=-=-=-=-=-=-=-=-=-=-=- FRIDAY FEATURE/ Eric Schmidt Goes Googly Eric Schmidt is both a lord of the geeks and one of our favorite all-around observers of the high-tech scene. Silicon Valley pedigrees don't get any bluer-chip: Bell Labs, Xerox's legendary PARC research center, Sun Microsystems, then chairman and (until earlier this year) CEO of networking software stalwart Novell. This summer he piled on two more titles: chairman and CEO of Google, the upstart (and current runaway leader) Internet search engine. And he still finds time to think high thoughts, about everything from the architecture of the Net to the lobbying game in Washington. American Spectator caught up with him in August. Go to http://www.gilder.com/ to read the interview ~~~~~~~~~~ FRIDAY BONUS/ Free Words The Internet is certainly a wealth of information, but would you believe 12 volumes, more than half-million definitions, 22 million searchable words? All available online and for free! Yes, free. Well believe it. Just point your browsers to http://www.global-language.com/century/ to view "The Century Dictionary," a century-old language resource that is now the largest, freely available dictionary on the World Wide Web. In order to view the pages, you'll need to download the DjVu plug-in by clicking on the icon in the bottom left-hand menu bar, or just go to http://www.lizardtech.com/ Once installed, you can view actual pages of the dictionary, search, scroll, scale, do virtually everything you could want but actually feel the parchment. DjVu, a product of LizardTech (http://www.lizrdtech), is an amazingly flexible image compression technology developed at AT&T Labs that allows very high quality page images to be compressed to a size suitable for delivery over the Internet. Well worth checking out. ~~~~~~~~~~ FRIDAY BONUS 2/ Internet Taxation With the Senate failing to act on extending the Internet tax moratorium and lawmakers not returning to session before its October 21 expiration, the moratorium on new and discriminatory Internet taxes and the ban on Internet access taxes will lapse, opening the door to "economic mischief" by local and state taxing authorities and implanting further uncertainty in the already crippled technology market. If you believe that the net should remain free, head over to the Center for Individual Freedom's Internet Taxation section, http://www.cfif.org/legis/federal/internet/tax/index.html, and read up on the fight against Internet taxation. ~~~~~~~~~~ FRIDAY BONUS 3/ Network Centric Warfare "We must build forces that draw upon the revolutionary advances in the technology of war... one that relies ore heavily on stealth, precision weaponry, and information technologies." --George W. Bush, Commander in Chief To that end, the Department of Defense filed a report to Congress on "Network Centric Warfare." http://www.c3i.osd.mil/NCW/ Included in the report is the book, "Understanding Information Warfare" by David S. Alberts, John J. Garstka, Richard E. Hayes and David A. Signori -- available for download in PDF format, free. =-=-=-=-=-=-=-=-=-=-==-=-=-=-=-=-=-=-=-=-=-=-=- GET THE GILDER TECHNOLOGY REPORT Monthly, From the Heart of the Telecosm http://www.gildertech.com/ ~~~~~~~~~~~~~~~~ GET THE DIGITAL POWER REPORT Electrons Matter http://www.digitalpowerreport.com/ ~~~~~~~~~~~~~~~~ GET DYNAMIC SILICON Linking the Microcosm and the Telecosm http://www.dynamicsilicon.com/ ~~~~~~~~~~~~~~~~ GET THE AMERICAN SPECTATOR Online special--50% off cover price! http://www.gilder.com/AmSpecSub.asp =-=-=-=-=-=-=-=-=-=-==-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=- ~~~~~~~~~~~~ Gilder.com Poll Results Question: Will mobile Internet overtake fixed-line Internet? Results: 30% Yes; 30% No; 40% Doesn't matter, it's the information stupid Up Next: Should the US send ground troops into Afghanistan? Weigh in now at http://www.gilder.com/ ~~~~~~~~~~~~ READINGS Global Crossing Talks Debt Swap http://news.ft.com/ft/gx.cgi/ftc?pagename=View&;c=Article&cid=FT32WTK5TSC Sun Micro smiles on auctions http://globalarchive.ft.com/globalarchive/article.html?id=011015000134 Williams Deploys Corvis http://www.lightreading.com/document.asp?doc_id=8920 Concert Plays Its Last Note http://www.internetweek.com/story/INW20011017S0001 Attractive Telecoms? http://news.ft.com/ft/gx.cgi/ftc?pagename=View&;c=Article&cid=FT36CMA1TSC China's Big Three in Telecom http://globalarchive.ft.com/globalarchive/article.html?id=011017002045 Intel Calls Bottom http://www.nytimes.com/2001/10/17/technology/17CHIP.html (Registration Required) Apple Exceeds http://www.nytimes.com/2001/10/18/technology/18APPL.html (Registration Required) Nextwave Deadline http://www.nytimes.com/2001/10/19/technology/19SPEC.html (Registration Required) Handspring's Treo http://news.ft.com/ft/gx.cgi/ftc?pagename=View&;c=Article&cid=FT34MNH7TSC Sprint: GPS Cell Phones http://news.cnet.com/news/0-1004-200-7363200.html?tag=mn_hd Motorola: Gas Powered Cell Phones http://www.zdnet.com/zdnn/stories/news/0%2C4586%2C5097726%2C00.html Power Saving Chips http://www.nytimes.com/2001/10/16/technology/16CHIP.html (Registration Required) How Bad Software Pays Dividends http://www.cio.com/archive/101501/wasting.html Windows XP May Spark Ultimate Battle to Own the Net http://news.cnet.com/news/0-1003-201-7540650-0.html Technology on the Molecular Scale http://www.nytimes.com/2001/10/18/science/18TRAN.html (Registration Required) Physicists: Redefining Reality http://www.nytimes.com/2001/10/16/science/physical/16ESSA.html (Registration Required) Investigating Online Music http://www.nytimes.com/2001/10/16/technology/16MUSI.html (Registration Required) RIAA Wants To Hack Your PC http://wired.com/news/conflict/0,2100,47552,00.html EU "Punishes Efficiency" http://news.ft.com/ft/gx.cgi/ftc?pagename=View&;c=Article&cid=FT3BG4U8TSC FTC Shuts Down Pop-Up Trapping Sites http://news.cnet.com/news/0-1005-200-7371736.html?tag=mn_hd E-mail Turns 30 http://dailynews.yahoo.com/h/nm/20011001/tc/tech_email_anniversary_dc_1.html Annual Oregon Salmon Run Is Strongest Since 1938 http://www.cnn.com/2001/TECH/science/10/18/many.salmon.ap/index.html -=-=-=-=-=-=-=-=-=-==-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=- GILDER CONFERENCE CALENDAR **Telecosm Conference Rescheduled** Telecosm 2001: Charge of the Light Brigade November 4-6, 2001 at The Fairmont * San Francisco, CA For more details, visit http://www.gilder.com/telecosm =-=-=-=-=-=-=-=-=-=-==-=-=-=-=-=-=-=-=-=-=-=-=-=-=- FRIDAY LETTER STAFF ~~~~~~~~~~~~~~~~~~~~~~~ Dave Dortman (ddortman@gilder.com) John Hammill (jhammill@gilder.com) E-Mail Wizard Bob Sauve (rsauve@gilder.com) CONTRIBUTORS THIS WEEK: John Hammill, Dave Dortman, Spencer Reiss, Sandy Fleischmann, Aaron Charlwood, filterdblue ADVERTISING INFORMATION ~~~~~~~~~~~~~~~~~~~~~~~ The Friday Letter is mailed each week to more than 150,000 subscribers and friends of Gilder Publishing, including industry leaders, financial professionals and individual investors. For information about advertising, contact Brian Cole, VP Business Development at bcole@gilder.com, tel 860-434-0614. FEEDBACK AND PROBLEMS ~~~~~~~~~~~~~~~~~~~~~ Send letters to the editor to Fridayletter@gilder.com For technical problems, please e-mail Fridayhelp@gilder.com You can also contact us via: Gilder Publishing, Customer Service 888-484-2727; outside the U.S.1-413-644-2100 1-413-644-2123 (fax) =-=-=-=-=-=-=-=-=-=-==-=-=-=-=-=-=-=-=-=-=-=-=-=-=- The Friday Letter is published weekly for subscribers and friends of Gilder Publishing. If someone you know would enjoy it, please feel free to forward a copy. To SUBSCRIBE please visit http://www.gilder.com/ =-=-=-=-=-=-=-=-=-=-==-=-=-=-=-=-=-=-=-=-=-=-=-=-=- Copyright 2001 Gilder Publishing LLC --- You are currently subscribed to gilder-technology-report as: alewis@ect.enron.com To unsubscribe send a blank email to leave-gilder-technology-report-661837S@earth.lyris.net
|