The Medium is Not Necessarily the Message

NewGothamVC sees exceptional opportunities in three areas:

1. Internet-television convergence .
Satellite, telephony and cable companies are racing to provide interactive, on-demand programming and personalized commerce to home consumers. In the process, they are experimenting with myriad technology alternatives, many of which are spawned by start-up firms (e.g., Real Networks). In all likelihood, Internet-television convergence will be spearheaded by some combination of the industries now competing for the prize. Fortunes will be won and lost in the interim until the market embraces network protocol standards. In this battle, content is king. Companies capable of creating and/or managing interactive content will profit irrespective of the medium ultimately adopted.

2. Exchanges and marketplaces.
The Internet is a catalyst for new ways of conducting business. In the business-to-business sector, companies in search of cost savings are bringing suppliers together in competitive bidding exchanges (e.g., Procter & Gamble). Organizations that have traditionally sold products indirectly are now cutting out market intermediaries (e.g., Compaq). In the business-to-consumer sector, start-ups are catering to niche market sectors and leveraging the low costs of conducting commerce online (e.g., Amazon.com). Auction sites are dispersing unsold product inventories (e.g., Auction.com and Priceline.com).

3. Interactive marketing and advertising.
Dozens of software and service companies have emerged in the last three years to support the sales and distribution of online advertising (e.g., NetGravity and DoubleClick). Inspired by the ability of the Web to personalize content, major advertisers are implementing direct marketing campaigns online, even if their historical emphasis has been branding. Nearly $1 billion in 1997, online ad sales are expected to exceed $4 billion by 2000.

The Importance of Being Opportunistic

In an industry as volatile as information technology, it pays to be flexible. NewGothamVC will revisit periodically its investment targets and make adjustments as new opportunities arise. Specifically, it may from time to time invest in companies outside the metropolitan New York City area and outside the scope of Internet-enabled businesses and Internet technologies.