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            B R E A K F A S T   W I T H   T H E   F O O L
                      Friday, November 3, 2000

benjamin.rogers@enron.com
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people always do that, but the really great make you believe
that you too can become great." --Mark Twain


PRICELINE THINS ITS RANKS
The Internet discount company announced a third-quarter loss,
the resignation of its CFO, and a restructuring plan.

By Mike Trigg

Embattled name-your-price Internet discount company
priceline.com (Nasdaq: PCLN) announced a third-quarter loss
after the market's close yesterday that met lowered Street
expectations. In addition, the company announced the resignation
of CFO Heidi Miller and a restructuring plan that includes
cutting 16% of its workforce.

Priceline posted a fiscal third-quarter (ended September 30) net
loss of $2 million, or $0.01 per share, compared to a lose of
$11.9 million, or $0.08 per share, a year ago. Revenue came in
at $341 million, slightly below expectations. Moreover, the
company forecasts a sequential revenue decline for the fourth
quarter, continuing to see signs of weak demand.

President and CEO Daniel Schulman blamed the revenue shortfall
on negative publicity and problems with its airline ticket
business. Priceline continues to be dogged by consumer
complaints, highlighted by the revelation that popular company
spokesman William Shatner has never used the services himself.
In the airline business, the company has experienced adverse
effects from rising fuel prices and airlines' own discounts.

Looking to perform some damage control, the company also
announced a number of restructuring moves. Priceline announced
it would fire 87 of its 535 employees, forcing it to take a
charge for an undisclosed amount that will hurt fourth-quarter
results. Also, the company will take a $9 million non-cash
charge due to a change in a warrant held by Delta Air Lines
(NYSE: DAL).

The company finished the quarter with $131 million in cash and
short-term investments, not all that bad depending on the burn
rate, although no guidance has been given. Nevertheless, the
debate still wages on with this company regarding the
survivability of is business model. With 80% of its revenues
derived from airline ticket sales, it comes as no surprise that
even the slightest misstep can cause damage. Of course, shutting
different business lines down, such as Priceline WebHouse Club,
only makes matters worse and leads many to question whether this
notion of diversification is fact or fiction. At this point, we
can only wait and see.
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NEWS TO GO

Mobile phone equipment company Qualcomm (Nasdaq: QCOM) reported
better-than-expected fiscal fourth-quarter results after the
market's close yesterday. However, revenues fell short of
expectations because of slow demand in its largest market, South
Korea. The San Diego-based company reported net income of $200.8
million, or $0.25 per share, compared to $182.9 million, or
$0.24 per share, in the same period last year. That beat the
Street consensus estimate by a penny. Revenues fell to $635
million from the year-ago figure of $716 million, a decrease of
11%. The revenue shortfall was caused by the South Korean
government, which banned mobile phone discounts, cutting demand.
Chairman and CEO Irwin Jacobs reiterated that CDMA-based
wireless data and Internet access applications would fuel
industry growth.

Information technology and consulting company Computer Sciences
(NYSE: CSC) reported second-quarter earnings that met Street
expectations, citing strong U.S. and international sales despite
difficult conditions in Australia and Europe. The company
reported earnings of $109 million, or $0.64 per share, compared
to $93.1 million, or $0.55 per share, a year ago. While
suffering from a weak euro, revenue still came in at $2.5
billion, a 12% increase from the year-ago period. Key
announcements in the quarter include a $3 billion contract from
Nortel Networks (NYSE: NT)

During an investors conference in Atlanta, United Parcel Service
(NYSE: UPS) discussed the company's current performance and
outlook. It noted that it's in-line to meet Street expectations
for the fourth quarter, but that there could be a slowdown in
the growth rate. For the coming year, company goals include
revenue growth of 10%, earnings per share growth in the
mid-teens, and a return on equity of about 30%. The world's
largest express carrier is also expecting a strong holiday
season with peak day deliveries of 19 million or greater.

The number three media company, Viacom (NYSE: VIA), announced
today it has agreed to acquire privately held BET Holding II,
the parent company of Black Entertainment Television. The deal
is valued at $3 billion in stock and debt. BET Chairman and
majority owner Robert Johnson will remain chairman and CEO of
the cable channel geared to African Americans. It joins a Viacom
portfolio that includes CBS, MTV, VH1, Nickelodeon, Paramount
films, Infinity Broadcasting Corp., and King World Productions.
Viacom Chairman and CEO Sumner Redstone noted regarding the
purchase that the addition of Robert Johnson, Black
Entertainment Television, and other holdings would contribute
significantly to the company's existing brands and management
expertise.

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