Thursday, February 10, 2005
Even United Online is entering VoIP (quotes from the conf call)
Mark Goldston, United Online's CEO, discusses his plans to enter the Voice over IP market during his Q4 earnings conference call:
Today we're announcing our intention to build a completely new business within United Online… We are creating a VoIP division… and it's our intention to develop and market a nationally advertised, value-priced VoIP product under the NetZero brand name to the consumer market by the end of 2005.
The NetZero VoIP product will be designed to replace conventional home phone services and give consumers a high quality, attractively priced alternative to existing home LAN lines service and competitive VoIP entries. We will have multiple aspects to our VoIP product array and the goal of becoming the same kind of powerful disruptive market force in the VoIP category that we have been in the Internet access category.
We think the VoIP category is going to be huge and that it's got many of the same dynamics as the dialup Internet access market, including many of the same telecom-vendor relationships that we have today, similar types of scalability techniques, similar connectivity software, etc… We're still refining our plan and our launch date is being nailed down as we speak.
The competition in the value dial-up segment is greater today than it has been at any point in our history.
(Quotes from the CCBN StreetEvents transcript.)
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So cool. This stock is going to take off tommorrow. They are introducing within a few months a dial up product called 3G (3rd Generation) that's way faster then AOL and it has an "instant" internet button like broadband. I'm not sure how they'll do it, but Mark Goldstein was really excited about it. He said that it would have broadband like speeds and will be priced well below broadband. It won't let you P2P at fast speeds and it sounds like downloading won't be as fast as the broadband, but it sounds like something that bluelight.com customers would get excited about and it really differentiates themselves from AOL. He mentioned in the call that they have confidential partners that will be offering services through it.
Advertising revenues were huge and they projected strong growth in almost every division (except dialup). Their photosite product still sucks. I went to sign up davisfreeberg.com for hosting and it was more expensive then anyone and they only offered one gig. It's clearly catering to Mom and Dads not us. Netzero VOIP sounds really awesome. Goldstein said that it would be something that was majorly different then any other VOIP product. Something that would really set them apart. Not just price. He said that they don't bring "me too" products to the market. In the middle of the call some whacko shareholder, somehow managed to get through (I don't think that many people are really that interested in UNTD) and Goldstein was like who are you? and he's like I'm a shareholder and then he rambled on for about 2 minutes before Goldstein had to cut him off. It was kind of funny. He sounded really angry, but I couldn't understand why? The company has had huge growth for 15 qtrs. The management team is amazing at UNTD. They gross about 615K per employee. They love buying undervalued assets and then turn them profitable. The stocks pretty volatile, I'm sure he got burned by his own greed. At the end of the call Goldstein said if anyone has further questions contact the company, then he stopped and said no wait better yet call me directly. (clearly meaning, leave us alone unless you know my private number) I love whacky shareholders.
120 Million in free cash flow per year, 200 Million in cash, 60 Million debt, 5 Million paying customers (only 100K dial-up additions this qtr though and declining next), 17 Million active email accounts. 45 Million Registered Users. $60 Million, committed to buying back stock until the end of the year, 50 Million dividend, 30 Million Unique hits and the market cap is only 500 Million. I've been putting it in my retirement accounts for the last six months.
Posted by: Davis Freeberg | May 4, 2005 12:42 AM