Commtouch Case Study-Combining Internet and Commercial Online Searching for a Public Company

Company homepage: www.commtouch.com

Look at company description (“About”), investor relations, products, News (mostly positive news, must search further), employment (very few openings)

Is the company public (U.S.)?

http://quote.yahoo.com/lookup

Answer: Yes. Symbol: CTCH

Get company profile (use ticker symbol for accurate searching):

http://search.corporateinformation.com/cgi-bin/usticker.asp

http://www.hoovers.com/co/capsule/1/0,2163,59541,00.html

http://www.business.com/directory/telecommunications/business_solutions/commtouch_software/

Financials: http://www.hoovers.com/quarterlies/1/0,2167,59541,00.html

Competitors?? (category too general, must check elsewhere) http://www.stockselector.com/industrycomp.asp?symbol=CTCH

Idendify potential clients:

Used InfoUSA to search for businesses. Searched for “internet”. Chose “7374-18 INTERNET SERVICES E-MAIL SERVICES”, in the “credit ratings” option select A or B. Received a quotation for about $55 for 6 companies.

Used free Yellowpages listing, search by “electronic mail service”. Found 1 client in LA, 1 client in SF. Search each city individually…

Search Thomasregister for “electronic mail”, get 30 clients under “e-mail services”.

News search (to complement own press releases):

From Northernlight: Learn about Class Action: http://library.northernlight.com/LP20010305020000121.html?cb=0&sc=0#doc

From TheMarker: Learn about new financing sources: http://www.themarker.com/ibo/archive/arc_article.jhtml?ElementId=gp20010607_01&origin=ibo

http://www.themarker.com/ibo/archive/arc_article.jhtml?ElementId=rmk20010606_01&origin=ibo

From FindArticles: Problem with order of articles, however, a lot of info on deals and clients http://www.findarticles.com/cf_0/PI/search.jhtml?magR=all+magazines&key=Commtouch

From the horse’s mouth (news groups and discussion boards):

Newsgroups search via Google (http://groups.google.com/)

Results for Commtouch: http://groups.google.com/groups?q=Commtouch&btnG=Search&meta=site%3Dgroups (Learn about service problems)

Stock Talk from Silicon Investor: http://www.siliconinvestor.com/stocktalk/searchresults.gsp?s=ctch&domain=Messages

Ditto from Raging Bull: http://ragingbull.lycos.com/mboard/boards.cgi?board=CTCH

What about market share? Ranking? Market size? Investment research? Competitors?

Commercial Online Search Results

Commtouch: Sample competitor report (10 of 226 competitors)

DIALOG(R)File 559:CORPTECH Dir of Tech Companies

Company

Name Sales Employees

------------------------------ ------------- ---------

Cox Communications, Inc. 2,318,100,000 12,348

Sterling Commerce, Inc. / COMM 150,000,000 600

800 Support 66,599,999 800

Juno Online Services, Inc. 52,000,000 263

USA.NET, Inc. 40,000,000 250

PenTeleData, Inc. 24,000,000 150

CommTouch, Inc. 19,000,000 130

Homestead.com, Inc. 15,000,000 128

TranSettlements Network Servic 15,000,000 60

WAM!NET, Inc. 15,000,000 500

Commtouch: Sample Analyst Report (judging by the availability of reports, it seems like the analysts have lost interest in this company)

DIALOG(R)File 545:Investext(R)

11778660

CommTouch, Inc.

CORPORATE TECHNOLOGY INFORMATION SERVICES, INC.

Corporate Technology Information Services, Inc.

MASSACHUSETTS (COMMONWEALTH OF)

DATE: February 27, 01

INVESTEXT(tm) REPORT NUMBER: 4409863 , PAGE 0 OF 2, CONTENTS PAGE

This is a(n) COMPANY report.

SECTION/TABLE HEADINGS: Pages

----------------------- -----

Name, Address and Telephone ..................................... 1

Sales and Employees ............................................. 1

Executives ...................................................... 1

Ownership and Description ....................................... 1

Products ........................................................ 1

Corporate Family ................................................ 1

Corporate History ............................................... 2

Executive History ............................................... 2

Sales and Employment Performance Analysis ....................... 2

Peer Group Comparison ........................................... 2

Data Currency ................................................... 2

Subject Descriptors: Pages

-------------------- -----

ANNUAL/OPERATING RESULTS ........................................ 2

COMPANY DESCRIPTION ............................................. 1-2

CORPORATE STRUCTURE ............................................. 1

EMPLOYEE/LABOR RELATIONS ........................................ 2

LINES OF BUSINESS/PRODUCTS ...................................... 1

MANAGEMENT ...................................................... 1-2

SALES/EARNINGS .................................................. 1-2

Company: *COMMTOUCH SOFTWARE LTD;

Ticker Symbol: *CTCH;

Headquarter Geographic Area: ISRAEL; MIDDLE EAST; ASIAN CONTINENT

Geographic Codes: ISR; MDEAST; ASIA;

Corporate Source Type: OTHER

CommTouch, Inc.

CORPORATE TECHNOLOGY INFORMATION SERVICES, INC. (DATE: February 27, 01)

(Report Number: 4409863 )PAGE 1

TEXT:

***************

CommTouch, Inc.

***************

========================================================================

PROFILE

========================================================================

ALT. NAMES: - CommTouch, Inc.

FKA - CommTouch Software, Inc.

ADDRESS: 3945 Freedom Cir., Suite 400

Santa Clara, CA 95054-1268

TELEPHONE: (408) 653-4330

FAX: (408) 653-4331

INTERNET: http://www.commtouch.com

info@commtouch.com

SALES: Estimated annual sales of $19 million (12 months ending

December 31, 1999); 2.5% to 10% of sales are from

international business.

EMPLOYEES: 130 employees (as of March 16, 2000); company reported 333%

employment growth in the year prior to interview; no

employment change projected for the next fiscal year.

EXECUTIVES: Mr. Gideon Mantel - Co-Founder/CEO (C.E.O.)

Mr. James Collins - Chief Financial Officer (Finance)

Mr. Ronen Rosenblatt - VP of Research and Development (R&D)

Mr. Igor Gusak - VP of Sales (Sales)

Mr. Robert Gerber - VP of Marketing (Marketing)

Mr. Amir Lev - Co-Founder/CTO/General Manager (Engineering,

Tech Transfer)

Ms. Toni Jenkins - Purchasing Manager (Purchasing)

Ms. Yael Elish - VP of Strategic Development (Strategic

Planning, Corporate Dev.)

Mr. Dan Dolberger - Director of Media Development (Public

Relations)

Ms. Isabel Maxwell - President ()

Mr. Avner Amram - VP of Operations ()

OWNERSHIP: Operating unit of a non-U.S. parent.

Provider of customized e-mail services. Products and services are sold

to multiple industries. This company was capitalized by venture capital.

PRIM. IND: Telecommunications & Internet (TEL)

PRIM. SIC: 7375

PRODUCTS:

CORPTECH SIC DESCRIPTION

SOF-OA-ME 7372 Electronic message systems software

TEL-IF-D 7375 Digital transaction-based Internet services

TEL-IM-E 4813 Internet e-mail services

TEL-IM-P 4813 IP telephony services

TEL-IW-H 7375 E-mail hosting services

CORPORATE FAMILY:

CommTouch Software, Ltd, Israel (parent)

CommTouch, Inc., Santa Clara, CA (this profile)

Wingra Technologies, LLC, Madison, WI

CommTouch, Inc.

CORPORATE TECHNOLOGY INFORMATION SERVICES, INC. (DATE: February 27, 01)

(Report Number: 4409863 )PAGE 2

TEXT:

========================================================================

CORPORATE HISTORY

========================================================================

No corporate changes have been recorded since May 1999.

------------------------------------------------------------------------

========================================================================

EXECUTIVE HISTORY

========================================================================

Currently Listed Executives for whom changes have been recorded since

May 1999, sorted as above, reflecting changes in the profile listing in

the months indicated.

------------------------------------------------------------------------

Toni Jenkins, Purchasing Manager

o March 2000: Listing changed to Purchasing Manager (Purchasing).

Listed in or before May 1999 as Administrator.

Dan Dolberger, Director of Media Development

o March 2000: Listing changed to Director of Media Development (Public

Relations).

Listed in or before May 1999 as Director of Media Development.

Previously Listed Executives for whom changes have been recorded since

May 1999, sorted alphabetically by last name, and reflecting changes in

the profile listing in the months indicated.

------------------------------------------------------------------------

Jacob Ippen

o Listing deleted: March 2000.

Listed in or before May 1999 as Manager of Quality Assurance (Quality).

Yuvad Neria

o Listing deleted: March 2000.

Listed in or before May 1999 as VP of International Sales (Int'l Sales &

Mktg.).

Eran Schindler

o Listing deleted: March 2000.

Listed in or before May 1999 as VP of Finance.

========================================================================

PERFORMANCE ANALYSIS

========================================================================

Sales and employment figures have not necessarily been adjusted for

mergers, acquisitions or divestitures.

------------------------------------------------------------------------

Sales(1) 1998 1999

-------------------- --------- ---------

Date: Dec 31 Dec 31

Sales ($m): $4.8(2) $19.0(2)

Year-to-year change: - 295.8%

1 Most recent years for which data are available ("-" indicates data

not provided).

2 Estimated. Calculation:(actual employment) x (industry average sales

per employee).

Employees(1) 1999 2000

-------------------- --------- ---------

Date: May 19 Mar 16

Employees: 30 130

Annualized rate of change: - 402.9%

1 As of the most recent updates ("-" indicates data not provided).

Rankings(1) National Region Industry

Northern Telecomm

(as of Feb 25, 2001) All U.S. California & Internet

--------------------- --------------- --------------- ---------------

Ranked out of 48,966 4,646 10,185

Annual Sales: 10,190 780 1,257

Employees: 10,988 897 1,517

Employees Growth:

-Last Year 603 145 440

-Projected 11,338 1,200 3,427

Sales/Employee: 17,428 1,614 4,851

1 Figures selected from all companies providing relevant data.

Companies who did not provide data receive the lowest ranking.

************************************************************************

* DATA CURRENCY: *

* o The PROFILE data were confirmed by telephone on May. 19, 1999. *

* o The data contained in the HISTORY and PERFORMANCE sections were *

* collected when CorpTech updated this profile in the indicated *

* months (between May 1999 and May 1999). *

************************************************************************

From the CorpTech Database of Technology Companies (URI: 1250R2).

300 Baker Ave., Concord, MA 01742, USA. 978-318-4300 / www.corptech.com.

------------------------------------------------------------------------

Commtouch: Market size and share, industry forecasts

3/9/1

DIALOG(R)File 9:Business & Industry(R)

03115827 (THIS IS THE FULLTEXT)

Maxwell's house

(By 2003, the market for application service providers and other outsourced

services will be worth up to US$24 bil)

Euronet (The), v 1, n 9, p 30

March 2001

DOCUMENT TYPE: Journal (United Kingdom)

LANGUAGE: English RECORD TYPE: Fulltext

WORD COUNT: 2370

TEXT:

Isabel Maxwell, president of Commtouch, comes from a famous publishing

family and for years worked in television and cinema, both in front of and

behind, the camera. However, since 1997, she has eschewed the glamourous

end of the industry to focus her energies on email and messaging which

describes as the serial killer application of the Internet age

FLAPJACK, THE LONDON AGENCY THAT looks after the European PR interests of

this month's subject, Isabel Maxwell, the president of Commtouch, made it

plain that should I ask any questions relating to her family history or

personal background, the interview would be terminated forthwith.

Now, The Euronet runs a CEO 'mover and shaker" type profile every month and

although these are designed to dwell more on the company under discussion

than the personality of the individual running it, it is nonetheless usual

to ask the interviewee a few questions about commercial antecedents, about

any particular prior successes or failures, beliefs or philosophies,

idiosyncrasies or characteristics that inform present business strategies

and future plans.

In short, a bit of an insight into a private individual can help cast

light on how and why a company operates as it does in public. It helps put

things into context. After all, last months' final deciphering of the

complete human genome shows for once and for all that we are creatures more

formed by the haphazard lottery of parentage, environment, upbringing and

past experience than any inherent and immutable hard-wired nature.

However, as I very much wanted to meet Ms. Maxwell, I agreed, reluctantly,

to abide by Flapjack's strictures. And, I'm glad to be able to report that

Isabel Maxwell proved to be a much more feisty and much less precious

subject than the PR company would have had me believe. Indeed she provided

information and opinion aplenty and over the course of a lengthy meeting

sparked an interest and interaction that was the antithesis of the anodyne

audience I had been both expecting and dreading.

So, to get a few things out of the way. Isabel Maxwell is indeed the

daughter of the late publishing tycoon, Robert Maxwell. His story, of

remarkable political and business success (Maxwell was at one time a

British Member of Parliament as well as the prescient founder of the

Pergamon Press and as chief of the Mirror Group, a larger-than-life media

mogul), eventual fall from grace and ignominious end is well recorded and

plays little part here.

Suffice it to say that I was once introduced to Robert Maxwell (me and

about a hundred other journalists, that is), and found his gargantuan

presence and overbearing manner pretty hard to take. Isabel Maxwell was

nothing like that. She was approachable, funny, frank and

self-deprecating. Furthermore, she was both knowledgeable and evangelic

about her company and the communications industry.

I met Isabel Maxwell in London as she passed through the city on her way

back to the United States after attending the massively influential annual

World Economic Forum in Davos, Switzerland, where she had been honoured as

one of the world's Top 100 Technology Pioneers. She was nursing a bad cold

brought on, she told me, "by hanging around for too long at the top of a

ski slope".

Warwick: You work, you do business and you make money, as a senior figure

in Internet infrastructure in general and integrated email and messaging

solutions for business in particular. You also champion the use of

messaging to create communications without borders and to help bridge

cultures and ethnicities. Why is this so important to you and doesn't the

one actually militate against the credibility of the other?

Maxwell: No. Why on earth should it? I'm a citizen of the world, we all

are. We have to get along together and to do that we have to communicate.

Look at me, my father was Czech, I was born in France, schooled in England

and various other places, I now live in the USA and work for a company

founded in Israel! So, it's hardly surprising that I believe very strongly

in bringing individuals, groups and resources together to work on solutions

to the so-called 'digital divide' and I am sure that email and messaging,

as well as being a massive business opportunity, can help international

understanding and even actually promote world peace.

It was a real honour for me to be named as a Technology Pioneer at Davos

because it is a recognition that my company, Commtouch, is engaged in one

of the most innovative areas driving the new economy and that

communications technologies can be and are being used to foster social

progress and improve the human condition.

Warwick: You have worked in several different branches of the media

industry. In television you have been both in front of and behind the

camera and you have even produced and directed a couple of movies. I take

it you could have continued your career in almost any part of the media

that might take your fancy, so why did you decide to settle on and with

email and messaging?

Maxwell: Because, despite what some people might think or say, email isn't

the Cinderella of the communications industry, it's not even a princess;

it's actually the absolute monarch of Internet applications and it will

play an integral role in the growth of Internet-based business and

e-commerce. Quite simply, it's where the future is because email and

messaging applications are revolutionising the way global business and

society communicates. To put it another way, email isn't just the killer

application of the Internet, it's the serial killer application.

I've been with Commtouch since February 1997 and I've followed the

evolution of email since it's early history in the mainframe to mainframe

environment and all the way through to the Hotmail revolution. I don't want

to bombard you with statistics, but I'll give you a few figures and a

couple of 'for instances'.

I think it was IDC that came up with the estimate that somewhere near 4

billion emails were sent last year and there are about 700 million

mailboxes worldwide. It's hard to pin these figures down exactly because

they change so fast and by the time you look at them they've already

increased. However, taking those as a base and then factoring-in the growth

in application service provision and other outsourced business in general -

and both the the Gartner Group and IDC reckon that will be worth at least

US$24 billion by 2003 as against $1 billion last year - I reckon Commtouch

is in the right place at the right time.

Warwick: You say that, but Commtouch, like many other companies in the

telecoms industry, has recently given investors and the market a bit of a

shock. You had to issue a profits warning and admit that revenue and

earnings expectations would not match forecasts. How did that affect the

company and what are you doing to put matters right?

Maxwell: Commtouch is a public company and we have responsibilities to our

shareholders, our investors and to the market. We had to be honest and

up-front. Credibility is everything in business and as soon as it became

apparent that our Q4 2000 revenues would be below expectations we had to

act.

So, we immediately announced revised revenue and earnings forecasts for

fiscal 2001. We now expect revenue to be in the range of $40 to $45

million. That is a hard-nosed, realistic estimate that reflects the

economic downturn that suddenly became apparent in the US towards the end

of last year.

The downturn hit the dot.com companies and online consumer sectors

particularly hard and that had a knock-on effect - straight on to us. What

happened was that several destination site service companies failed and

went under owing us money - and we just had to cope with it. And we've been

further affected by a longer sales cycle with our enterprise channel

partners, that, again, has come about because of the dot.com and online

business.

That said though, although it is prudent and necessary to reduce

expectations in the online consumer website market, we are increasing our

revenue forecast for messaging products and services to enterprise and

service provider markets. What's more, we are very pleased with the results

we are achieving in delivering a robust and powerful core email and

messaging platform that has the highest possible levels of reliability,

scalability, security and performance.

In addition, we have instituted some far-reaching changes within Commtouch

itself such as reducing the operating expenses associated with supporting

the dot.com and destination site markets, closing our ecommerce division

and email services for small community sites and driving greater

efficiencies in channel sales and marketing to the enterprise market. We

will reduce our headcount, worldwide by some 20% and reduce our overall

operating expenses by $16 million from the operating plan for 2001.

And remember, our financial position remains strong. We have more than

enough cash available (my comment: This is probably why class action was worthwhile to file) to reach profitability arid we expect that by to be

achieved by the fourth quarter of this year.

Warwick: While we're on the subject of economic downturns, on a much

broader level, you are probably aware that there is a lot of speculation -

and indeed hope - that this time Europe will be able to weather a

recession in the US without our economies going down the tubes as well,

What's your take on that? Do you think it's possible?

Maxwell: It's good question. I've no facts, just a hunch, a gut feeling;

which is that the US seems to be talking itself into a recession. There's

this idea that because the country has done so well for such a long time

under Clinton - and after the farrago of the disputed presidential election

results - we must be due a down-turn, even if there's no real reason why

there should be one. It all seems a bit superstitious, but it is reality

sandwich time. I guess we're going to take a bite and find out what it

tastes like.

Sure, the whole dot.com mess didn't help and for a while the market really

was insane. And it's a great shame that when people finally realised that

many of the startups had nothing to offer but vague promises and lot of

smoke and mirrors, the shakeout that inevitably followed saw a lot of

healthy baby businesses being thrown out with the dot.coms' bathwater.

Hopefully, the good ones, the tough ones will towel-off and get back to it.

The rest don't deserve to.

As for Europe, I do think it is in a good position to ride this one out. I

think it's more a matter of being psychologically strong and economically

brave than anything else. I'm a big believer that you get what you work for

and what you really want.

If things get seriously bad in the States then, of course, there will be

some effect here, but it should be possible to contain it, it depends on

nerve and confidence.

And, don't forget, we work in a global industry. In the past any downturn

in one part of the world has always been mitigated by an upturn somewhere

else. Although, that said, real globalisation is now getting so set-in and

is producing such a complex set of interlocked interdependencies between

companies and economies that any deep and major recession could spread to

take in the whole world.

Warwick: And, for you, Commtouch is a global company?

Maxwell: Absolutely, and not just for me, for everyone in the organisation.

Globalisation is real, it isn't an option, it extends into every aspect

and every facet of business. I always say, 'If you are not global, you've

got to stay at home', and there's no future in that. And, of course,

global competition is real, it doesn't just take place in your own back

yard.

It is ignorant and counter-productive to be insensitive to cultural

differences between countries. It has always been assumed that the

'traditional' language of the Internet has been, and will continue to be,

English. But that's not so.

IDC research has found that 50% of the world's email users don't have

English as a first language - indeed many of them don't speak English at

all. And by 2010, more than 60% of email users will communicate in

languages other than English. What's more, the NUA consulting agency

estimates that the English language Internet users will increase by six per

cent per annum while other language users will increase by 150%.

Commtouch is smart, sensible and sensitive. Our messaging and email

interfaces are in 19 languages, ranging from Castilian Spanish through to

Catalan, Russian, Bulgarian, and both traditional and simplified Chinese.

Warwick: And finally, what is the next big challenge going to be?

Commtouch

Maxwell: Customer Relationship Management. I know CRM is a current hot

acronym, but the concept is solid. Commtouch is platform agnostic. We don't

care what box our customers use, but do care that we provide the best

professional service and offering added-value. The next big issue will be

fully enforceable, monitorable Service Level and Quality of Service

agreements.

@ a glance

From truly modest beginnings in 1991 (the idea for the company was first

hatched in a chicken coop on an Israeli kibbutz),Commtouch has grown to

become a global provider of outsourced integrated email and messaging

solutions for destination sites, service providers, wireless carriers, and

online businesses both big and small.

Currently serving more than 18 million individual end-user mail box

subscribers through 400 global customers and 300,000 web sites, Commtouch

operates services in 26 languages in 180 countries. The applications and

service provided range from online calendaring through to unified messaging

integration with audio-visual mail, voice, fax and pager and wireless

access.

Commtouch works with a global customer and alliance base of more than 400

different corporations, small to medium -sized enterprises, ASPs, data

centres, ISPs, new-entrant competitive carriers, portals and online

businesses. Some of these organisations include; Asahi-Shimbun,

Bristol-Myers, British Telecom, Compaq, Citibank, Ericsson, Intel,

Microsoft, Sun Microsystems, Sumitomo, Swiss Bank, Time-Warner, Toshiba and

United Airlines.

The company, which presently has some 450 employees worldwide, has received

several industry awards for both its commercial and consumer email

applications. Commtouch is headquartered in Silicon Valley, California,

USA, while research and development is carried out in Israel.

In December last year Commtouch acquired Wingra Technologies, a company

expert in helping enterprises to migrate from legacy email and messaging

systems to robust solutions.

COMPANY NAMES: COMMTOUCH SOFTWARE LTD

INDUSTRY NAMES: Network hardware and software; Telecom services;

Telecommunications

PRODUCT NAMES: Electronic mail services (482024); Application Service

Providers, Internet (737510)

CONCEPT TERMS: All company; All market information; E-Commerce; Industry

forecasts; Internet activity; Market size ; Users

GEOGRAPHIC NAMES: World (WOR)

10/9/3

DIALOG(R)File 9:Business & Industry(R)

02984103

Get the Message

(Commtouch provides customized messaging services to 16 mil e-mail boxes

around the world; overall, the number of e-mail boxes is expected to grow

from 350 mil to 530 mil)

Wireless Review Extra Supplement, p 4

October 01, 2000

DOCUMENT TYPE: Journal ISSN: 0741-6520 (United States)

LANGUAGE: English RECORD TYPE: Abstract

ABSTRACT:

According to IDC, more people will be accessing the Internet via wireless

devices than via personal computers. Also, the number of e-mail boxes

around the world will grow from approximately 350 mil to over 530 mil, with

the majority of these owned by enterprises. Commtouch is one such

enterprise. It boasts 16 mil e-mail boxes around the world, providing

clients with customized messaging services.

COMPANY NAMES: COMMTOUCH SOFTWARE LTD

INDUSTRY NAMES: Network hardware and software; Software; Telecom services;

Telecommunications

PRODUCT NAMES: Electronic mail services (482024); Communications software

packages, except networking (737251)

CONCEPT TERMS: All market information; Industry forecasts ; Market size;

Users

GEOGRAPHIC NAMES: North America (NOAX); United States (USA)