Page 2                                                           The Sun

                                                        Volume 4, Issue 4
New Study Shows What Works on the Web
And What Doesn't.

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 "After the Gold Rush" was published by Woburn Mass.-based consulting firm Innosight, which is associated with the Harvard Business School Press, and Clayton M. Christensen, a Harvard Business School professor. Christensen and his colleagues studied a wide variety of Web start-ups to understand what went right and more importantly, what went wrong.

Lessons Learned:

  • If you’re entering a venue where a competitor already has the infrastructure in place to meet customer needs and your organization must start from scratch, chances are good the established company will trounce you
  • Simply "dumping" an existing business onto the Internet doesn’t work.
  • Many that tried failed. To be successful on the Web, a company must exploit its unique advantages.
  • Innosight found that many companies misjudged the needs of the market they entered, selling convenience, for example, when reliability was the more desired feature.
  • Ask this crucial question about any Internet company, says the study’s authors: "Does the new business enable a larger population of less-skilled or less-wealthy people to do things for themselves that they could not do before?" The more the new enterprise satisfies that criterion, the greater the probability it will get traction in the market.

Shell-Texaco Joint Ventures Face Their Final Days (as told by Oil Express)

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 Shell, Texaco and Saudi Refining have just about carved out definitive deals that will unwind Texaco’s interest from the Motiva, Equilon and Equiva joint ventures and clear the way for Chevron’s multibillion acquisition of Texaco.

Officials with Royal Dutch Shell say they are in the final stage of discussions on purchase of the joint ventures. Chevron is not expected to pick up any downstream U.S. properties, sources say. In fact, Chevron CEO David O’Reilly told analysts last week that the merged Chevron/Texaco will be "over weighted in the upstream," which will offer the company better growth and return than downstream assets.

Here’s how the various entities will own Motiva’s East and Gulf Coast assets on a 50-50 basis.

Equilon will be wholly owned and operated by Shell, and Equiva, which

 provides trading and services for the joint ventures, will be rolled into Equilon. In essence, Shell will be able to bill Motiva for services rendered by Equiva.

The FTC will almost certainly order a refinery sale by Equilon before it gives its blessing to the Chevron/Texaco purchase. Regulators will probably require that Equilon sell its 98,000b/d Wilmington, California refinery. They are not comfortable with one company, Shell, operating nearly 500,000 b/d of West Coast capacity, particularly when Chevron already operates over 510,000 b/d of California output.

The Texaco brand is expected to be licensed for five to 10 years to the Motiva and Equilon joint ventures. Jobbers feel that this means no growth for Texaco, and a heavy emphasis on the Shell name.

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