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Market cap is the wrong number to look at. Try revenue, which paints a much different story.

Actually, if you read AOL's 10-Q for last September (most recent available), you'll see that they make 3 times as much from subscriptions as they do from ad revenue.

Revenues: (millions)
Subscription services..... $995
Ads, commerce, etc. .... $350
Enterprise solutions ...... $122
Total.......................... $1467

For details, look at the SEC filing.

That being said, I agree with your conclusion that the high value assigned to AOL is due to its future potential as a marketing medium. But today, it turns a profit by selling access, not ads.

-cwk.

When a corporation is organized, by law (and in some cases regulations close to being laws) it must have

• a President, the person who "presides" over the company making day to day decisions. Everybody in the company reports (directly or indirectly through other managers) to the president.

• The president works for the shareholders, the owners, but indirectly through an group elected by the shareholders, the board of directors who represent the owners interests. The person who presides over the board of directors is the Chairman.
  For a small company, the board of directors is likely to be the investors themselves (VCs, for example). For a large company, then you see execs from other companies. (somebody here (Cliff Stoll?) said "go to the library" -- uh, there's this new thing, I like to call it the "web"? take a look here :)
  The board meets quarterly, sometimes more, and hears a pitch from the President, who then leaves while the board discusses and votes. Some decisions require board approval, but the President mostly better do what they say because they can fire her. They decide things like "we need to sell a new chunk of shares to raise money to buy AOL" or "we are not going to pay a dividend this quarter because we wish to use the money to pay down our debt"

• a Treasurer who is in charge of keeping track of the cash, the shares and the debts and the assets

I think there are other jobs like "counsel" (a lawyer) and "secretary" (keeps track of the decisions) which I will ignore. Remember, these positions must exist by law.

Now, in large organizations and those where insiders are the shareholders and they maintain a lot of control, it can be convenient for them to switch some of the roles around, consolidating and delegating on the basis of the needs of the business or the particular strengths of the personalities. This is where we get unofficial but descriptive titles like

• CEO, the Chief Executive Officer, the person who makes day to day but strategic decisions. It can be the President or the Chairman, or in rare cases neither. This is very likely to be a charismatic person who you identify with the company (Jobs or Trump) or the shrewd "brains" (Buffet) or a really good manager (Welch at GE). They are very future oriented, and keep the collective eyes on the ball.

• COO is important to a company that has extensive operations. Think of IBM, with its vast manufacturing and service networks with bezillions of employees. Day to day they don't make glamorous decisions, but they make sure the rubber meets the road.

• CFO keeps track of the financial big picture (there is way more to this than you can imagine). Generally the Treasurer, the CFO keeps track of the long-term money (from investors) with a bean counter underneath called the Controller keeping track of the short term money from/to customers/suppliers. There are probably examples of visionary CFOs who have a starched Treasurer working for them.

• CIO for companies that rely heavily on their information (Wall Street, Airlines)

• CTO, mostly bullshit so some techie with a lot of stock feels important, but can be a real job. Think of companies that use technology strategically (FedEx) not companies that produce it (Microsoft).

• RHAT
• LNUX
• LINX

But anyway, what can you do? Linking to one of the more recent in The Register from your web site or in your .sig is probably a good idea.

If you're a US citizen, also complain to the SEC, the government organization overseeing everything related to stock trading. Their web page is here, and makes it quite clear that what LinuxOne is doing is potentially illegal:

For example, it is unlawful in certain situations for someone to sell securities to you while withholding important information that could affect your investment decision, such as selling you stock in a company but not disclosing to you that the business has no existing operations or selling a stock to you for ten dollars per share when the seller knows the stock is worthless.

I'd say they'd at least take a good look at LinuxOne if enough people complain...

For those of you not familiar with EDGAR, this is the on-line database that the U.S. Securities and Exchange Commission provides so that investors have access to the legally required filings of companies that have gone public.

I played around with it today, and this is the most effective query that I could compose. You should be able to just click the following link and see all of the documents related to Andover. Some of these documents discuss the how nature of Rob's contract with Andover, the relationship between Andover and Blockstackers, and related subjects.

http://www.sec.gov/cgi-bin/sr ch-edgar?ANDOVER+ADJ+NET

--

Dave Aiello

For those of you not familiar with EDGAR, this is the on-line database that the U.S. Securities and Exchange Commission provides so that investors have access to the legally required filings of companies that have gone public.

I played around with it today, and this is the most effective query that I could compose. You should be able to just click the following link and see all of the documents related to Andover. Some of these documents discuss the how nature of Rob's contract with Andover, the relationship between Andover and Blockstackers, and related subjects.

http://www.sec.gov/cgi-bin/sr ch-edgar?ANDOVER+ADJ+NET

--

Dave Aiello

I quote some choice lines from their S-1 filing. These folks really need to be whipped!

We are an emerging developer and provider of open source software and services, including the LinuxOne Operating System, which we call "LinuxOne OS". Unlike proprietary software, open source software has publicly available source code and can be copied, modified and distributed with minimal restrictions.

No mention of GPL!

Since it was only introduced in September, 1999, we do not have a history of operations, but we believe it will become one of the more popular Linux-based operating systems in the world.

Yeah right! Hello! How do they plan on doing this? Mailing it to the 2 billion armpits in China?

We seek to establish a position as a leading provider of open source software and services by: - continuing to enhance our web site to create one of the definitive online destinations for the open source community;

And what an awesome begining they've had so far. One of the stalwart figures of the community Bruce Perens has been openly critical about them and has shown no signs of withdrawing his criticism, since LinuxOne has obviously made no effort to involve him or the other leaders in the community.

They then go ahead and list the following risks.

Few open source software products have gained widespread commercial acceptance partly due to the lack of viable open source industry participants to offer adequate service and support on a long-term basis.

Huh???? Apache and Linux have not gained commercial acceptance?

OUR RELIANCE ON THE SUPPORT OF LINUX TORVALDS AND OTHER PROMINENT LINUX DEVELOPERS COULD IMPAIR OUR ABILITY TO RELEASE MAJOR PRODUCT UPGRADES AND ESTABLISH MARKET SHARE.

LinuxOne INC S-1

"The shares will be offered for sale by our management for a period of 180 days, unless extended in the discretion of our Board of Directors for an additional 90 days. No commissions will be paid to our management for any sales they make. This is a "self-underwritten" offering."

So, they are planning to spam tens of thousands of people to offer them the opportunity to buy worthless stock. It's so worthless they can't get an underwriter to touch it!!

You have to wonder if the recent IPOs and the general "market likes Linux" mentality has encouraged many "fortune 500" companies to jump on the bandwagon in order to boost their stock price.

It is unfortunate in our market economy we have to be more worried about stock prices than even making money. Nice link off the Suck parody yesterday to the SEC filing for Andover.net (which includes Rob's stock deal with Andover) also contains a line which says "WE EXPECT TO INCUR SUBSTANTIAL LOSSES IN THE FUTURE."

I don't know, maybe it is just me but how can companies like this get blown up, while real companies with real income (see banks, insurance) are sitting pretty low.

So way to go "Open Source" we may not help companies profit, but we will push stock prices up, that's for sure.

Amazon is a sinking ship. During the quarter ended September 30th, they lost over $197 million. That's more than $2 million per day. They have cash (and cash equivalents) of $905 million. At this rate, it is entirely possible that they could be bankrupt in another 12 months.

At the same time, the markets are trading their shares in the $80s right now, giving them a market cap of almost $30 billion. Many, many executives at Amazon (heck, many people manning telephones at Amazon) are dependent on an ever-escalating stock price for a large portion of their compensation. As a result Amazon needs to keep this house of cards from collapsing, lest they lose all of their staff and management team. The way to keep the stock price high is by manipulating the sentiments of the speculators who trade in Amazon stock.

I expect a variety of stunts and announcements from Amazon.com over the next six months or so. Expect to see a variety of "strategic partnerships" a la the U.S. Postal Service's arrangement with Amazon. Expect more "strategic" aquisitions, using Amazon's inflated stock. Expect many, many public maneuvers to convince the speculators that the future is bright, that Amazon is growing, and that Real Soon Now they will turn profitable.

Some legal sabre-rattling over a bogus patent fits right in with that approach. To Joe Daytrader, this will appear yet another validation of Amazon's brilliant prospects. "Look, they've even got a patent on this stuff!" he will exclaim. Thus emboldened, Joe Daytrader will feel that he is justified in buying even more Amazon stock at, say $95.

Eventually time will run out for Amazon. The mathematics are simple and stark: at this rate, they will have no more cash before the end of 2000. At that point, they will be unable to pay their debts. They will be bankrupted.

Get out while you still can.

This company claims to have "over forty" patents. Nothing comes up in an international search of the IBM server under C3D, TriDStore, C-Trid, and a couple other variations of the names listed in their SEC filing.

Lots of people are going to need to decide whether they are going to pony up a minumum of $1,100.00 to buy shares in VA. Be sure to follow their instructions and READ THE PROSPECTUS before you agree to buy the shares.

And to protect myself from the lawyers, I need to tell you that I am not offering financial or legal advice. I'm just some schmuck who has thoughts to share. All are offered as-is with no warranty, etc. etc.

The S-1 Filing for the company is available online. Note that they also have a number of S-1/A filings online.

Here are some thoughts on the company:

• Revenues

  Thankfully, VA has a fairly good revenue stream ( 1998: $5,556,000.00 1999: $17,710,000.00 ) however, when one looks at the cost of revenues it also goes up, and in fact goes up disproportionately. ( 1998: $4,494,000.00 1999: $17,766,000.00 ).

  This means that while VA had a pretty good gross margin in 1998, they actually went negative for 1999. Not a good trend.

  The "gross margin" they mean here is how much they earned or lost by producing their product. A company can never be profitable until the gross margin is positive. When the gross margin is negative, the company is losing money on each unit sold. When the gross margin is positive and the company sells enough units they will make a profit, what being in business is ultimately about.

  One has to wonder what happened that the gross margin went from $1,062,000.00 in 1998 to -$56,000 in 1999. Why did the cost of revenues go up so much?

• Speculative Limitations

  Deutsche Banc Alex requires you to send funds within three days of the IPO to cover your positions. Additionally, they take 10 days to wait for your check to clear. You may not transfer the shares to any other broker until your check has cleared. Note that they do not appear to offer online trading, and only have a single non-800 number listed to trade shares. They will only accept market orders (e.g. sell at any price) for the first day. All this for the low, low commission of $53.

• Selected Risks
  • History of losses

    The prospectus says it best:

    We have a history of losses and expect to continue to incur net losses for the foreseeable future.

    We incurred losses of $14.5 million in fiscal 1999 primarily due to expansion of our operations, and we had an accumulated deficit of $29.9 million as of October 29, 1999. We expect to continue to incur significant product development, sales and marketing and administrative expenses, particularly as a result of expanding our direct sales force. In addition, we are investing considerable resources in our professional services organization and our Internet operations. We do not expect to generate sufficient revenues to achieve profitability and, therefore, we expect to continue to incur net losses for at least the foreseeable future. If we do achieve profitability, we may not be able to sustain it.

    No plans to make money into the forseeable future? Ouch. Now you know one reason why IPOs are considered risky. If their cost of revenues (which does not include administrative, sales, marketing, etc. costs as far as I know) does not come down, they'll be unable to make money even if they "generate sufficient revenues".

  • Synnex Dependency

    We rely on Synnex as our single source contract manufacturer. If Synnex is unable to meet our manufacturing needs or our relationship terminates, we may lose revenues and damage our customer relationships.

    So VA's server business (which in an earlier risk was mentioned to be 59% of their fiscal 1998 revenues and 88% of their revenues in the quarter ending October 29 1999) is completely tied to Synnex. Who's Synnex? Are they a stable company? Any risks associated with Synnex would naturally be inherited by VA due to this single-supplier arrangement.

  • Irritating Developers

    If the Linux developer community fails to support us or reacts negatively to our business strategy, our business will be harmed.

    The third parties in the Linux developer community, upon whom we rely to develop and maintain a majority of our software, may not continue to support us, our product promotions or our corporate or operating decisions. If we lose the support of these third parties, we would be forced to rely to a significantly greater extent on our own development efforts, which would require us to hire additional developers and increase our development expenses and could adversely impact product release schedules. In addition, negative reactions of third parties in the Linux developer community could harm our reputation, diminish our brand and result in lower net revenues.

    Hmmm... they must read Slashdot as well. ;-> I personally don't think this is a significant risk, but yes, it's there.

    And speaking of irritating the developers, how about this little tidbit:

  • Intellectual Property

    We may not be able to use intellectual property to protect ourselves from competition.

    Our systems consist primarily of commodity hardware components in combination with the Linux operating system. While we have developed some proprietary techniques and expertise, most of our activities and systems are not protectable as proprietary intellectual property and may be used by competitors, harming our market share and product revenues. To protect our intellectual property, we generally enter into confidentiality or license agreements with our employees, consultants and corporate partners. We have also recently commenced a patent program and to date have filed one patent application. In general, however, we have taken only limited steps to protect our intellectual property. Accordingly, we may be unable to use intellectual property to prevent other companies from competing with us. In addition, we may be unable to prevent third parties from developing techniques that are similar or superior to our technology, or from designing around our copyrights, patents and trade secrets.

    This is to be expected from any Open Source company. Hopefully the GPL will be deemed enforceable in a court of law which will limit the ability of competitors to compete unless they too assume this risk.

    And yes, the doubts on enforceability of the General Public Licence were also listed as a risk.

  • Dilution

    You will experience immediate and substantial dilution in the book value of your shares.

    The initial public offering price is substantially higher than the book value per share of our outstanding common stock immediately after the offering. Accordingly, if you purchase common stock in the offering, youwill incur immediate dilution of approximately $10.41, assuming an initial public offering price of $12.00 per share, in the book value per share of our common stock from the price you pay for our common stock. For additional information on dilution of the book value of your shares, see "Dilution."

    It's pretty common to have significant dilution as part of an IPO, but the magnitude of this dilution is enough to give one pause. Keep in mind that you'd be paying $11-13 for something only worth approximately $1.59.

Of course, if you're just in the mood to gamble, this is as good as any. However, this could be a great opportunity to take a look at a company's financials and really try to decode them. You'll find that it's not that much harder than picking through some ugly perl script once you know how to do it, and it can be much more profitable... ;->

Any other thoughts on the soundness of this company?

An alternative method of accounting for stock options is SFAS 123, Accounting
for Stock-Based Compensation. Under SFAS 123, employee stock options are valued at grant date using the Black-Scholes valuation model, and compensation cost is recognized ratably over the vesting period. Had compensation cost for the Company's stock option and employee stock purchase plans been determined based on the Black-Scholes value at the grant dates for awards, pro forma income statements...would have been as follows:

Microsoft own a small amount of SCO, see their yearly report:

SCO 1999 DEF 14A

[As of 31 December 1998, Microsoft Corporation owns 12.3% of SCO.]

But the agreement that you mention was created at around the time that SCO sold Microsoft Xenix. This was for a certain amount of time, and has since expired. (Actually this reminds me of the guy who created Pong... Wasn't he supposed to have agreed not to compete with Atari(?) in the video game arena until ~1985??)

Steve

This would doubtless do a good job of popping the ``Internet Bubble,'' and could result in an overall market bloodbatch as people re-examined the non-existent value of other enterprises that have seen bloated valuations due to peoples' miscomprehension of the use of "e-Business."

It would, however, be rather less fun for the principal participants, as it would be a downright fraud to issue an IPO to a thus-worthless company and then walk away with a bundle of dollars.

The above interpretation of matters also would not survive the scrutiny required by an IPO. See RHAT 424B1 Filing and S1.

I'm still biased towards the material I wrote way back when on Transmeta; it seems nearer accurate than anything publicized before or since...

This would doubtless do a good job of popping the ``Internet Bubble,'' and could result in an overall market bloodbatch as people re-examined the non-existent value of other enterprises that have seen bloated valuations due to peoples' miscomprehension of the use of "e-Business."

It would, however, be rather less fun for the principal participants, as it would be a downright fraud to issue an IPO to a thus-worthless company and then walk away with a bundle of dollars.

The above interpretation of matters also would not survive the scrutiny required by an IPO. See RHAT 424B1 Filing and S1.

I'm still biased towards the material I wrote way back when on Transmeta; it seems nearer accurate than anything publicized before or since...

In September 1997, the Company acquired all of the shares of Bank Rinderknecht AG ("BRA") for approximately U.S.$7.0 million. BRA, headquartered in Zurich, Switzerland, was active in private banking and securities trading for Swiss and foreign customers since 1870. BRA had been placed in liquidation by the Swiss Federal Banking Commission in August 1997.

Hey guys, we can do a lot better than third-hand rumor! Check out the EDGAR database at www.sec.gov, "the Fresh Meat of Wall Street".

SCO 1999 DEF 14A

This is SCO's annual proxy statement to shareholders. It lists all entities that own 5% or more of SCO. As of 31 December 1998, Microsoft Corporation owns 12.3% of SCO.

Sun's not listed here; neither is IBM. IBM does have a joint development project with SCO named "Monterey".

I've also heard the stories about a non-competition agreement about Microsoft and the Unix market, but again, I don't see any mention of them in SCO's public filings. It certainly doesn't appear on their balance sheet as an asset.

"Substantially all of our communications hardware and our other computer hardware operations related to our Web site are located in Herndon, Virginia. Fire, floods, HURRICANES, tornadoes, earthquakes, power loss, telecommunications failures, break-ins and similar events could damage these systems."
...
"Our insurance policies may not adequately compensate us for any losses that may occur due to failures or interruptions in our systems. WE DO NOT PRESENTLY HAVE ANY SECONDARY "OFF-SITE" SYSTEMS OR A FORMAL DISASTER RECOVERY PLAN."

RedHat SEC filing is he re. (page 13)

Woohoo 17th and H! :)

I worked there too, many years ago, as a network engineer right when whitehouse.gov was moving from JPL to the NEOB. Lotsa fun if you're the shoestring engineer that we all are, as they had next to no budget for anything.

Its good to see that it only took 4 years (*grin*) for them to come around from when we started infesting the EOP network with linux boxes. (The best was shado.whitehouse.gov, a monitoring box for web servers) We told them "shado" stood for Sureptitious Hacking And Detection Operation. Really we got the name from the TV Show from the 60's called U.F.O (Supreme Headquarters for the Alien Defense Organization), at the time, we also contemplated calling it "potatoe".

As I recall, the routers (Cisco 7000's) that handled the eop.gov (sprintlink) and whitehouse.gov (PSInet) links werent on anyones desk. :) They were in the cabinets in the Operations center across from the Vaxen. What I imagine really happened was one of the Synoptics 3030s died again, or the FDDI link to the firewalls went down.

As for large goverment web sites that run linux, go take a look at www.sec.gov. Does over a terabyte in traffic a month.

Farmy

This is one of the funnier lines in the article, since it so clearly applies to the writer rather than the folks he disagrees with.

In a couple of places, he refers to SGI being profitable. According to the SEC, SGI hasn't posted an annual profit in years. In the latest quarterly report, they posted another huge loss. They have 'announced' a $22 million profit for the latest quarter, but I'll reserve judgement until the 10Q is filed.

They are on their third CEO in three years.

They are on their third 'strategy' in three years.

They are selling off their NT and Cray divisions. The last time they did this, they sold the "Business Systems Division" piece of Cray to Sun for a pittance. Sun used that division to create the Starfire (actually, it was almost finished at SGI), which has already sold more than 1500 units, for a total of (guessing) more than $1.5 billion.

Not only are they losing money every quarter, their top line (ie, sales) have been shrinking for three years.

The value of their stock has dropped by about 50% in the last 9 months.

They just laid off more than 15% of their workforce.

How much do you need before acknowledging that a once-great company is in real trouble?

This is one of the funnier lines in the article, since it so clearly applies to the writer rather than the folks he disagrees with.

In a couple of places, he refers to SGI being profitable. According to the SEC, SGI hasn't posted an annual profit in years. In the latest quarterly report, they posted another huge loss. They have 'announced' a $22 million profit for the latest quarter, but I'll reserve judgement until the 10Q is filed.

They are on their third CEO in three years.

They are on their third 'strategy' in three years.

They are selling off their NT and Cray divisions. The last time they did this, they sold the "Business Systems Division" piece of Cray to Sun for a pittance. Sun used that division to create the Starfire (actually, it was almost finished at SGI), which has already sold more than 1500 units, for a total of (guessing) more than $1.5 billion.

Not only are they losing money every quarter, their top line (ie, sales) have been shrinking for three years.

The value of their stock has dropped by about 50% in the last 9 months.

They just laid off more than 15% of their workforce.

How much do you need before acknowledging that a once-great company is in real trouble?

Let's face it-- most linux people don't need tech support-- and that is the only thing Redhat -really- sells.

I have the impression that Red Hat expects (and, presumably, hopes) for that to change. In their S-1, they say things such as

Operating systems based on the Linux kernel are some of the better known open source products. Linux-based operating systems represented 17% of new license shipments of server operating systems in 1998, according to IDC. Despite strong initial market acceptance, these operating systems have been slow to penetrate large corporations at the enterprise level due in part to the lack of viable open source industry participants to offer technical support and other services on a long-term basis.

and

OUR STRATEGY

We seek to enhance our position as a leading provider of open source software and services by:

...

- expanding our professional services capabilities to capture large corporate business on an enterprise basis;

...

and (in the list of risks)

WE MAY NOT REALIZE ANY BENEFIT FROM THE PLANNED EXPANSION OF OUR SERVICES BUSINESS

We have recently begun to expand our strategic focus to place additional emphasis on consulting, custom development, education and support services. Historically, we have derived virtually all of our revenue from software product sales. Although we intend to continue to develop and sell Official Red Hat Linux, we anticipate that product sales will represent a declining percentage of our total revenue if our strategy is successful. We cannot be certain that our customers will engage our professional services organization to assist with support, consulting, custom development, training and implementation of our products. ...

Whether the bubble will burst or not is an interesting question. I could imagine it bursting (although it's not the only stock market bubble I could imagine bursting...), but I wouldn't assume that it'll necessarily burst because Linux will necessarily remain the province of those who "don't need tech support".

Will, I've appreciated you sharing your story, and the final outcome, quite a bit. But that 20% number came out of left field. Where the heck did you get that idea? The standard underwriting commission is 7%, and if you have $100K liquid assets to chase IPO's, long experience, et cetera, you should do that. Don't take the word of an anonymous coward for it, though. Here is Red Hat's 424b1 form filed with the Securities and Exchange Commission: http://www.se c.gov/Archives/edgar/data/1087423/0001047469-99-03 1070.txt Hit the page down button just once to see the numbers laid out clearly.

I have no beef that I didn't get any shares. I was expecting it to goto the lottery.

What I do have problems with is the problems in communications. no expectations were given with respect to how fast one needed to respond, and the general concensus here is that the window of opportunity was something like 20 minutes.

My recommendation to everyone is to follow the instructions about filing complaints, as listed on the SEC web pages (see the bottom of the web page) I'm going to file a complaint, and everyone else should, too. Maybe they'll fix how the process of an IPO happens and require that the offering price be published and locked for at least 12 hours before acceptances are closed.

- Kevin

(First a note about MPPP: their IPO price was $28, and they have not broken that price level.)

I've got one of The Letters and I'm in a position to use it. If it goes well, I'm going to take the money and live on it while I write some more open-source software.

I've been active in the stock market for several years. Before e*trade, there was no public access to IPO's. Companies like Netscape would go public, the underwriters would deal out the shares to elite customers at $20, the stock would open at $65, the elite customers would score $45, and the offering company would get $20. A lot of companies leave a lot of money "on the table" that way. That money goes into the pockets of well-connected Wall Street suits.

e*trade is busting that system open so that anybody can offer $20, or $25, or whatever they think is a good price -- so that $45-per-share gap will close up. The company will get more of the money (and I personally like to see a well-funded Red Hat), and the people who want to buy the stock get to put in bids for it, rather than being forced into the secondary market to pay that $65.

Some poor guy at e*trade must have gotten a hell of a slashdotting this week. Just in case they are monitoring this debate, I recommend: e*trade, forget the net-worth questionnaires, and really get to know your customer:

* We aren't just fans and well-wishers; like Scott Ananian said, we actually wrote the intellectual property that Red Hat sells.

* A lot of us don't fit the usual income and net worth parameters of our society. Be flexible here. If some guy wants to buy 100 shares, that's different from the usual customer buying 10,000 shares. Your mission is to offer service to the 100-share guy too, right?

* A lot of us don't fit the "blame somebody else" mentality of this society, either. If I get my shares, and RHAT trades below the print price, I am not going to blame e*trade. You do your job when the shares arrive in my account; you are not responsible for my decision to buy them or the market's decision about where the price goes, and I know this, deep down, through and through. We are willing to take responsibility for our decisions.

* In a situation like this, it would help if e*trade put up some more in-depth educational pages about the stock market and the IPO process. Make the Slashdot Effect work in your favor -- if you put up a good informative page, tens of thousands of people will read it. That's good for everybody.

* Learn what the news sources in our community are: Slashdot, Linux Weekly News, Wired, Salon, Slate. And learn that they publish on an hourly, not daily, schedule.

And now my two cents for all of us trying to get into the IPO ...

* Educate yourself. Motley Fool is a good place to start. I also like TheStreet.com and Yahoo Finance. Also check out the SEC EDGAR database, which is where they keep the raw data for Wall Street -- on the Internet, where anyone can read it (sound vaguely similar to anything you know?)

* I'm not planning to flip my shares. I hope you aren't planning to flip yours, either. If you ploughed your rent money into the IPO and you need it back right way ... I admire your guts, but you need to think about the risk, too.

* Know who your friends are. Yes, the IPO market is currently organized for the benefit of the Gnomes of Zurich. Yes, e*trade is probably your first contact with the IPO market (maybe even the stock market). That doesn't mean Red Hat and e*trade helped organize the current ripoff scheme. In fact they are both fighting it.

I don't work for e*trade, although it looks like I do, eh? Ok, bring on the flames.

That's it. That's the only question they should ask. S-1 statements are full of warnings in all caps that say

THIS OFFERING INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD CAREFULLY CONSIDER THE RISKS DESCRIBED BELOW AND THE OTHER INFORMATION IN THIS PROSPECTUS BEFORE DECIDING TO INVEST IN THE SHARES OF COMMON STOCK.

It's even funnier if you'd already read Red Hat's IPO filing with the SEC.

The ICANN is on probation. So long as they seem to be making progress towards breaking the NSI monopoly, they will be tolerated by the IETF, however if the ICANN goes rogue, there are still technical mechanisms available to reign both them and NSI in again.

The major problem is that Jon Postel died at the worst possible moment, when his vigilance was/is most required.

NSI is fighting for its life, and its officers know that. Their "service" has been so poor over the term that they've had the InterNIC contract that the minute there is viable competition, it is likely that most registrants will switch providers, and NSI will dry up and blow away (but not before the Securities & Exchange Commission gets ahold of them and prosecutes the corporate officers for fraud; they claimed that they owned ".com" in their prospectus. They do not).

We live in interesting times.

Yes, the SEC requires that any such potential risk factors (and "our product licensing is untested in court and might conceivably turn out to be worthless" is definitely a risk factor in their eyes) be plainly set out in an IPO. That's the rules of the game.

This is precisely why NSI had to announce that they owned the data; otherwise, the Prospectus for their public stock offering was a lie (it also claimed this), and thus NSI would be guilty of fraud.

The Securities & Exchange Commission which regulates the financial markets takes a very dim view of such things. Potentially, the officers and directors of NSI could be held criminally liable, and face prison time in addition to stiff fines.

Personally, I look forward to seeing those bastards strung up by their toes. The most enraging thing about this whole affair is NSI's rank incompetence in operating a key piece of Internet infrastructure, which has threatened the stability of the Internet as a whole.

Where ICANN is concerned, I'm willing to play "wait & see"; the most worrisome thing about them is that they also appear to be vying for some kind of control. They need to understand that they merely perform a service and administration function at the pleasure of the IETF, and not the other way around as they have been claiming.

Jonathan D. Lazarus. Jonathan D. Lazarus was with Microsoft Corporation from 1985 through 1996, serving most recently as Vice President, Strategic Relations. Mr. Lazarus serves on the Boards of ELEKOM Corp., Liquid Audio, NetGravity, Vision Solutions and National Association of Television Program Executives. Mr. Lazarus is also an advisor to Microsoft Corporation, the Universal Studios New Media Group and ZDTV.