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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, December 8, 2000

benjamin.rogers@enron.com
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"Behold the turtle. He only makes progress when he sticks his
neck out." --James Bryant Conant


QUESTIONS LEFT FOR ASK JEEVES TO ANSWER
The Internet search engine issued a waning yesterday, proving it
doesn't have all the answers.

By Mike Trigg

Internet know-it-all Ask Jeeves (Nasdaq: ASKJ), the provider of
a search engine that answers all our questions, issued an
earnings warning after the market's close yesterday. The company
attributed the shortfall to a slowing economy and reluctance
among companies to make additional outlays on online
advertisements. What's more, CEO Rob Wrubel also stepped down.

The Emeryville, California-based company, which makes money
through advertising and licensing, expects revenues of $25
million for the fourth quarter, about $10 million, or 30%, less
than the Street was expecting. Ask Jeeves also expects to post a
pro forma net loss of $18 million, or $0.50 per share, well
below the Street consensus of a $0.33-per-share loss. In the
previous quarter, the company posted a smaller-than-expected
loss of $12.6 million, or $0.36 per share.

"The broad-based economic slowdown has caused weakness in the
online advertising market, advertising pricing pressure, and a
decreased sense of urgency among Fortune 1000 companies to
implement their online initiatives," President Adam Klein said.
"Amongst this and other factors, we have experienced
weaker-than-anticipated demand for our solutions, however our
relationships with existing customers remain strong."

In other news, after more than two years on the job, CEO Rob
Wrubel will be stepping down from his board and CEO positions,
and assuming the role of executive vice president of market
development. (The Motley Fool interviewed Rubel back in
December.) Current board member George Battle will assume the
CEO position on an interim basis, while the company looks for a
replacement.
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After becoming a Street favorite, even receiving Motley Fool
Daily Double recognition, and hitting its 52-week high of $144,
the stock was punished along with the rest of the e-commerce
sector at the beginning of the year. The recent shortfall
shouldn't come as a complete shock. Advertising makes up a great
deal of the company's revenues and, with the dot-com demise,
demand for online advertising has diminished. Even Rule Maker
Yahoo! (Nasdaq: YHOO) has been hurt this year, in part, over
similar concerns.
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Despite the unfortunate news, the company still remains
optimistic. Regarding 2001 revenue and earnings guidance, the
company for once wasn't giving all the answers, saying that it
was reviewing growth targets. Nevertheless, Ask Jeeves maintains
it has enough cash in the "engine" to keep answering questions
until reaching expected profitability in the fourth quarter of
2001. Whether that's the case will be the biggest question left
for the company to answer.
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NEWS TO GO

Not long ago, a 23-year-old former employee of Internet Wire
produced a phony press release, falsely reporting that the CEO
of Emulex (Nasdaq: EMLX) had resigned, the company was restating
earnings, and there was a pending investigation by the SEC. The
hoax resulted in Emulex shares tumbling nearly 60% in one day.
It appears the maker of computer cards that increase data
transmission has moved beyond all that, announcing an agreement
to acquire closely held computer-networking company Giganet for
$645 million in stock. Emulex announced that it would issue
about 4 million shares and assumed options for Giganet. The
price was based on yesterday's closing price for Emulex shares,
$155.75. While not expected to reduce per-share profits for the
fiscal year (ending July 1), upon completing the acquisition,
the company plans on taking a non-cash charge of $10 million.

According to a statement published on the Standard & Poor's
website, copyright protection solutions provider Macrovision
(Nasdaq: MVSN) will be added to the Standard & Poor's MidCap 400
Index after the market's close on December 8. It will replace energy
services holding company LG&E Energy Corp. (NYSE: LGE).

Microwave telecommunications products maker California Amplifier
(Nasdaq: CAMP) issued a fourth-quarter earnings warning and
reported third-quarter results. The company expects earnings of
$0.08 or $0.09 per share and revenues between $29 million and
$31 million in the fourth quarter. The Street consensus estimate
called for the company to earn $0.17 per share. Moreover,
California Amplifier also reported third-quarter earnings of
$2.29 million, or $0.16 a share, meeting the Streets
expectations. Sales climbed to $32.6 million compared to $26.3
million in the same period last year.

Computer products seller CDW Computer Centers Inc. (Nasdaq:
CDWC) announced in a press release that it expects earnings
between $0.40 per share and $0.42 per share in the fourth
quarter. That's below the Street consensus expectation of $0.50
per share. The company also expects revenue to be between $990
million and $1.1 billion, representing year-over-year sales
growth between 34% and 36%. "Currently, we are facing
slower-than-expected demand due to economic uncertainties, which
we believe is an industry-wide phenomenon," CEO Michael Krasny
said in a statement. "These economic uncertainties make us
cautious about 2001, when we believe CDW will continue to
increase market share, but grow sales at lower rates than recent
quarters."

Maker of liquid crystal displays for mobile phones Three-Five
Systems Inc. (NYSE: TFS) announced that it expects a
fourth-quarter profit between $0.08 and $0.10 per share, well
below earlier profit guidance of $0.19 to $0.20 per share. The
Street consensus expectation called for the company to earn
$0.20 per share. The company also informed investors that it was
expecting sales between $36 million and $38 million. It had been
expecting $45 million in revenues. Commenting on the coming
year, President and CEO Jack L. Saltich remarked, "Our guidance
for 2001 remains unchanged. On a relative basis, sequential
revenue growth in the first quarter is expected, and that growth
should be in the range of 8% to 10%."
_________________________________________________________________

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