Steve,

Thanks for the update.  I was stunned by your email and didn't know about 
your father.  I am very sorry for your loss.  My thoughts and prayers are 
with you and your family.

Mike




Stephen R Horn
06/06/2000 07:05 PM
To: Mike McConnell/HOU/ECT@ECT, Jay Fitzgerald/Corp/Enron@ENRON, Allan 
Sommer/Corp/Enron@Enron
cc: Ellen Fowler/HOU/ECT@ECT, Drew Ries/HOU/ECT@ECT 
Subject: InfrastructureWorld.com--Memo from Larry Izzo

Please read the attached memo from Larry Izzo. He is obviously wanting to 
resurface Infrastructure World.  As you will note in the last paragraph, he 
is basically staking out a position that EECC is going to have to spend $2 
million on project management software development and  that he can capture 
free optionality of doing a deal with infrastructure world.

On the surface of it, this does not make sense on several dimensions:

1. It is not clear to me why EECC has to spend $2 million on project 
management software development. By definition, such software would want to 
be collaborative  and I don't understand the logic of why we would do it 
ourselves.

2. If there is a seperate carve-out of project management software that is 
required for what we do that is separate from what existing functionality of 
Cepren, Buzzsaw and Bidcom is doing; we may have an opportunity to do joint 
development with any of these players. The question is picking who we think 
would be a winner and figuring out if there is a deal to be done. Allan and 
Drew, together with the EECC, have orchestrated meetings next week with these 
three companies to figure out ways that EECC may be able to work together 
with one of them. I would note that Bechtel is an investor in Cephren so it 
is not clear that they expected these to entities to be directly competitive. 
It is not clear that Infrastructure World is preferable to one of these other 
alternatives.

3. It is obviously not my call as to whether EECC needs or will spend $2 
million for Project Management software development (although I am 
skeptical). From an investment perspective, there has not been that much that 
has progressed on Infrastructure World in the last six to eight weeks. The 
principal change has been a significant revaluation  and critical assessment 
of B2B business plans and particularly revenue models. I would thus say that 
two months ago my assessment given the Bechtel/Hull involvement that there 
was a 75% ability to do legitimate VC at $5 to $10 million pre-money (as 
opposed to the $15 million that it was done at). I would say that the 
probability would be 25% of $5 to $10 million with significant risk of doing 
subsequent rounds. I would thus have a view that we should pass from an 
investment perspective.

I have left Larry a voice mail that I am available to meet when I am back 
Thursday and Friday when I am back from my father's funeral. I will have a 
discussion along these points. I am on vacation next week , but  told Larry 
in the voice mail that the alternative is to meet with Allan (who is out this 
week) and one of the people from my team. 

---------------------- Forwarded by Stephen R Horn/HOU/ECT on 06/06/2000 
06:33 PM ---------------------------


Larry L Izzo@ENRON_DEVELOPMENT
05/31/2000 06:20 PM
To: Stephen R Horn@ECT
cc:  
Subject: InfrastructureWorld.com