Ryan Jacob Quotations

We're focusing on companies that will be long-term players on the Internet.

Three years ago, nobody took the Internet seriously. We're in it for the long term.

Software.net has the potential of being a leader in this space and there are clear comparisons to Egghead.com, and also to some of the online companies that sell CDs. They're really not that much different.

Right now investors are looking at any earnings reports as the glass half-empty rather than half-full.

I think we've had a tremendous run. I mean Nasdaq had a terrific year. A lot of the Internet names that we hold in the fund had terrific years and quite frankly I think going forward it's going to be more challenging.

I think everybody has been surprised at the speed of evolution we've seen in the sector. Usually new technologies take quite a while to catch on. The Internet has really changed the rules.

Really, the Internet is broader than one sector. We're going to focus on companies that focus the least on technology. Tech companies just are not attractive. They are too competitive, and they have predatory pricing.

Valuations in general for e-commerce companies have been historically higher than we've been comfortable with and they have low operating margins. So it's an area we've shied away from.

Well, eBay is growing at a phenomenal rate right now. This is a company, even though they are considered one of the bellwethers now because of their size, the revenue base is still relatively small, and they have a lot of momentum in their traffic and transactions.

Unfortunately, we still have Iraq dominating the news and any changes in the situation there will have a big affect -- although I think we are in a period now that's seasonally strong for the market, especially in technology. So, I think everyone's going to be very focused on how companies are doing in this fourth quarter and then, obviously, the holiday season.

When companies first come public, there's a lot of hype, anticipation. The company is out hyping the IPO on a road show and investors get very excited and they might pay a bit higher than they may in normal situations.

Something has changed (with Internet investing). You don't have the craziness of a wild IPO market.

It was a very positive sign. I think a lot of people were expecting a little sell-off.

For many of the Internet leaders, you're paying a high valuation with only modestly higher growth prospects.

It's pretty clear the fourth quarter of last year was pretty horrific, and we didn't need much of a bounce to post these kind of returns.

The news flow (from companies) is still quite negative.

Everyone's expecting, and should expect, that these companies will continue to post very impressive gains. A lot of these companies are still growing 30-50 percent per quarter. There will be other issues that people will be looking at. With Yahoo!, it may not be just revenues, it may be page views. With an Amazon, it may not just be revenues, it may be number of new customers they've acquired over the last quarter.

The biggest change in the past five years is that you can find very reasonably priced companies and most are making money. That's obviously a big change from the late 90's when these companies were just starting out.

The IPO market right now is very weak. However, when you have a deal this size and this level of recognition, a blue chip company, generally, companies like this can supersede market conditions.

In 1999, we'll see more consolidation activity as leaders gain more scale.

If you look at (Egghead.com and Software.net) as comparables, there's no way Software.net deserves their valuation. To me, Egghead.com is really compelling. They are on track to do $150-200 million in revenues this year; Software.net is nowhere near that.

This is more of a seasonal-type occurrence, and right now, we can look at the pipeline, which is relatively full, and have an idea that there will be a fair amount of deals coming to the market especially early in February.