<THE RULE MAKER PORTFOLIO>
By Matt Richey (TMF Verve)
ALEXANDRIA, VA (June 2, 1999) -- Today, let's continue our exploration of company home pages by taking a look at the world's largest Internet commerce site. At www.cisco.com, Cisco Systems' (Nasdaq: CSCO) website sells more than $28 million in products every day. By comparison, that's more than eight times the daily volume of e-tailing leader Amazon.com. As with yesterday's tour of Microsoft.com, the Cisco site is jam-packed with info. So rather than attempt to cover the breadth of the leading networker's Web offerings, I'm going to focus on what I feel are the top five destinations for an investor interested in learning the basics of Cisco's business.
If you know nothing at all about the networking industry, this is a great place to start. In five short parts, you'll learn the basics of networking technology and how Cisco fits in the picture. The very high-level Industry Background section tells the story of how a 1960s data network built for U.S. national security purposes became our modern collection of graphical Web pages that comprise the Internet. Then, the Networking Technology section explains and provides examples of the most common networking products and lingo, such as hubs, routers, protocols, and switches. The Industry Drivers section discusses key growth factors such as the convergence of voice/video/data and Internet commerce. Under Networking Customers, Cisco introduces its three customer segments: enterprises, service providers, and small/medium businesses. The overview concludes with a somewhat boilerplate listing of market risks, including Y2K and "increased competition." All in all, the overview does a good job of explaining the basics of the industry using plain language that anybody can understand.
"Every fourth person on the Internet is buying something right now."
"The Internet had more users in its first five years than the telephone did in it first thirty."
"This month another 18 million people will go online."
"E-mail already outnumbers regular mail by nearly ten to one."
You'll find these facts and much more on this page, which is part of the online version of the 1998 annual report. Here, you'll learn about the company's initiatives in Internet commerce, customer support, and more. Cisco is a living example of how the Internet is reshaping the world of commerce. With 64% of orders generated over the Web, Cisco's sales organization doesn't have to focus on order taking, but can instead build stronger customer relationships and provide better service. The company expects 80% of fiscal 1999 revenue to be received via the Web. Cisco's Internet commerce not only allows more efficient revenue generation, but also more effective customer support. Since Cisco's customers are typically Web-savvy techies, they have no problem finding answers to their technical questions using the searchable product documentation on the Cisco website. Check out this link to the Service and Support page, and you won't be surprised that 70% of support questions are answered over the Web.
This overview of fiber-optic (or simply "fiber") technology provides a foundation for understanding the anticipated convergence of voice, data, and video. In layman terms, this overview explains the technology behind optical networking, the plan for deployment of optical networks, and how Cisco fits into it all. The growing demand for data services (high-speed Internet access, on-demand video, etc.) is rendering inadequate the traditional circuit-switched voice network. Right now, service providers such as cable companies, regional Bell operating companies (RBOCs), and Internet service providers (ISPs) are deploying fiber as a solution to the bandwidth problem, but there's a long way to go. In the meantime, Cisco is working with the service providers to supply equipment and technologies that maximize the use of fiber, while still utilizing the existing legacy network.
Sometimes called the "holy grail" of networking, the integration of data, voice, and video is discussed on this page. As you can see on this page, Cisco predicts the following advantages from its packet-cell based infrastructure:
- Reduced operational costs
- Higher performance
- Greater flexibility, integration, and control
- Faster new application and service deployment
A very cool feature on this page is a link to a demo of voice over IP (Internet protocol) technology. Just call 1-800-800-1180 ext. 68529, and choose option 2.
In addition to building the backbone of the Internet, Cisco also provides e-commerce solutions for its customers. This page links you to information on Cisco's suite of tools that enable users to manage several business processes online, including product ordering, shipment tracking, and maintenance and warranty monitoring. These products seem to offer a compelling value proposition to businesses trying to get up and running on the Web. For all the details on Cisco's Networking MarketPlace products, check out this link.
I've only scratched the surface of Cisco's site in this report. If you decide to do some exploring on your own, you may also find interesting Cisco's company overview, keynote presentations, and multimedia gallery. If you find something cool, come tell us about it on the Rule Maker Companies message board (linked below) or the Cisco board.
Phil is back tomorrow with a tour of Intel's website.
Have a good evening,
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Day Month Year History R-MAKER +0.48% -0.93% 3.73% 31.26% S&P: +0.04% -0.54% 5.65% 30.73% NASDAQ: +0.85% -1.54% 10.93% 47.16% Rule Maker Stocks Rec'd # Security In At Now Change 2/3/98 48 Microsoft 39.13 78.44 100.43% 6/23/98 34 Cisco Syst 58.41 110.13 88.54% 5/1/98 55 Gap Inc. 34.37 62.63 82.21% 2/3/98 22 Pfizer 82.30 106.25 29.10% 2/13/98 44 Intel 42.34 51.94 22.68% 2/6/98 56 T. Rowe Pr 33.67 38.78 15.17% 5/26/98 18 AmExpress 104.07 118.44 13.81% 2/17/99 16 Yahoo Inc. 126.31 142.50 12.82% 2/27/98 27 Coca-Cola 69.11 68.63 -0.70% 8/21/98 44 Schering-P 47.99 45.13 -5.98% Foolish Four Stocks Rec'd # Security In At Value Change 3/12/98 20 Exxon 64.34 80.25 24.74% 3/12/98 15 Chevron 83.34 92.00 10.39% 3/12/98 20 Eastman Ko 63.15 66.81 5.80% 3/12/98 17 General Mo 72.41 70.06 -3.24% Rule Maker Stocks Rec'd # Security In At Value Change 2/3/98 48 Microsoft 1878.45 3765.00 $1886.55 6/23/98 34 Cisco Syst 1985.95 3744.25 $1758.30 5/1/98 55 Gap Inc. 1890.33 3444.38 $1554.05 2/3/98 22 Pfizer 1810.58 2337.50 $526.92 2/13/98 44 Intel 1862.83 2285.25 $422.42 2/6/98 56 T. Rowe Pr 1885.70 2171.75 $286.05 2/17/99 16 Yahoo Inc. 2020.95 2280.00 $259.05 5/26/98 18 AmExpress 1873.20 2131.88 $258.68 2/27/98 27 Coca-Cola 1865.89 1852.88 -$13.02 8/21/98 44 Schering-P 2111.7 1985.50 -$126.20 Foolish Four Stocks Rec'd # Security In At Value Change 3/12/98 20 Exxon 1286.70 1605.00 $318.30 3/12/98 15 Chevron 1250.14 1380.00 $129.86 3/12/98 20 Eastman Ko 1262.95 1336.25 $73.30 3/12/98 17 General Mo 1230.89 1191.06 -$39.83 CASH $70.09 TOTAL $31580.78
Note: The Rule Maker Portfolio began with $20,000 on February 2, 1998, and
it adds $2,000 in cash (which is soon invested in stocks) every six months.
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