September 27, 2006
By Andrew Carpenter
Publisher, Asia Business & Investing
abi@publishers-mgmt.com

This is a bit long, but I think you’ll agree, in the end, it leads someplace good.

NETTED

We were in Durham, NC, in the late 1980’s and early 1990’s. So if you know your Internet history, it will not come as a surprise to you that Lynn and were online way back in those days.

In 1991, we had a smoking hot computer – a 286 – with a fat HP laser printer… we were months or so away from being some of the first private citizens to own a 386. One reason for the cutting-edge stuff was we published a newsletter, even back then. Though, that one was for a big Washington, DC, association.

Since then we have pretty remained on the absolute forefront of computer technology… it’s the reason we’re Mac users.

Those days in Durham – a decade before the turn of the century – the city featured four distinct subcultures… ACC basketball addicts, gays and lesbians, frat boys and whacked-out computer geeks.

Weird, huh? Durham was a geek magnet. But, it’s true. While most people rightly assume MIT, Cal-Tech and Stanford drove the computer revolution… there were notable pockets of heavy geekdom on the East Coast… one of them was around Raleigh/Durham, where the now internationally famous Research Triangle was being born, back then.

NUTS or CRACKERS

So, we were in programmer/hacker heaven, though hacker was not a pejorative then – as it really isn’t with those in the know today… bad guys are crackers… immature bad guys who can’t write their own malicious programs, but use existing nasty codes, are generally referred to as script kiddies… just thought you’d want to know.

So anyway, we’re online back in 1991 because the entire USENET – pre www. – world was conceived in Durham, at Duke University. It was a poor man’s ARPANET that consisted of bulletin boards and news groups where some folks posted an idea and other people responded.

I am not sure we knew we were walking in the shadows of genius, but it was apparent that guys like Tom Truscott and (the late) Jim Ellis were high priests of something important, though yet to be defined.

By the way, going online back then cost about 10 bucks an hour… ouch.

We brought a lot of firepower to the game in those days. So much so, that when no one else could, hours before the first war with Iraq began, I was able to call my friend (the late) John Holliman at the Baghdad hotel where he and fellow CNN reporters Peter Arnett and Bernie Shaw were essentially prisoners.

That stunt, along with John’s request to deliver a message to a friend that, “the picture of Dorian Gray arrived intact,” ensured that all our phone calls and Internet traffic will – most likely forever – be monitored by U.S. spy agencies… though for the past two years the FBI has had my tacit permission to monitor my computer, but that’s another story altogether.

TEEVEE TIME

It was in early 1993, I think, when something came in the mail that attempted to alter my life. It was a free 30-day trial to CompuServe. There wasn’t much going on online in those days, but at least www. addresses had been born.

Fast forward a year, and CompuServe found us again, this time in Baltimore. I tried my free 30-days again. This time I did have some fun. The corporation that owned the newspaper I wrote for also owned the Weather Channel.

So, I was able to chat with the gang in Atlanta about what a shamefully pitiful miser our master was.

But at the end of 30 days I called it quits again – because the paper had promised to install one common Internet station in the newsroom. When CompuServe called to ask why I quit I told them, “The Internet is cutting into my TV time.”

Their rep asked me, in a serious tone, “What can we do to make the Internet more like TV for you.” As far as I am concerned, that’s the day the true, independent, democratic Internet died.

Still, back then I used to keep in touch with my hacker/cracker friends, some of whom were changing the world… others were trying to destroy what they created because they already saw the Internet for what it would become… not free… not democratic… just a new commercial home for pornographers… the media and, ahem, financial newsletters.

FAT SHARON – INTERNET STAR

I got a real glimpse of the new Internet in 1996. That’s when I broke the story of Sharon Lopatka. She was a Hampstead, Md., homemaker and Internet entrepreneur who sought bondage and torture via Internet chat rooms.

Lopatka’s tale was an international media phenomenon… ironically, mostly in print and on TV, because most folks didn’t have Internet connections back in ’96. Lopatka's story involved after-the-fact revelations of lurid sex, kinky online sales, 900 pages of deviant email correspondences and some public Internet pronouncements about how she wanted to be tortured to death.

After leaving a note for her husband “No matter what happens, know I’ll be at peace,” Lopatka let her desires lead her to North Carolina. There a man named Bobby Glass fulfilled her wishes. He died in prison in 2002, just two weeks before he was to be released from his manslaughter sentence for pulling the rope around Lopatka’s neck, as he confessed, “A little too tight.”

And, for a few weeks in 1996, the international media ate my dust as I (with help from a couple friends, notably a cool guy named Grant Gursky) cracked into Sharon Lopatka’s suddenly not so private life and continually broke the big news in the Lopatka case… though I will admit, The Washington Post was a close second, but it had seven reporters and researchers working the story. By the way, for those of you who read the marketing closely, that’s not the story that got me the Pulitzer Prize nomination.

FRIENDS IN LOW PLACES

I write all this because I want you to know that it’s real authority that allows me to write to you about the Internet… not some trumped up newsletter marketing scheme.

I usually keep this stuff in my pocket, because it’s usually not relevant.

Nor is it generally relevant that I still know some people who can – though I’d never agree to it – gladly accomplish things for me with computers that could euphemistically called online research. Frankly, I am a wimp and a privacy freak… too wimpy, in fact, to release the hounds even when others have set theirs on Lynn and me.

I suppose that could change someday – but I’ve always believed that 99% of any sort of attack is made by the weak upon the strong. So, I am smug about being the strong.

FRVT SET TO ROCK

Anyway, this probably was a long way to go, to tell you that it’s now time to totally load up on FutureVest (FRVT.PK).

We’re going to set aside, for a couple weeks, the fact that a source of mine saw FRVT’s CEO in China.

We’re also going to set aside the fact that FutureVest holds a big stake in a company called CipherPass (CPHC). It, CPHC, may be a month or so away from some solid positive news.

And, we’re going to ignore the fact that I think the FutureVest team is made up of some genuinely brilliant guys.

We won’t ignore that I have been touting FRVT for the past two years, as the way public businesses should be run.

What we’re going to focus on today is the fact that FRVT looks like it’s set to roll. Its shares have been drifting higher, which means some smart West Coast money likely agrees.

IZE PRINCESS

Today after the market closed FutureVest made news… that kind of news that made me sit down and write three pages of personal history to you.

You see, FRVT just acquired controlling interest in a Netherlands-based company called Izecom. Izecom is a cutting-edge software outfit that makes email encryption and security programs. Those security products work seamlessly with Microsoft and Lotus.

It’s the real deal.

FutureVest is re-forming Izecom as a US corporation and bringing its products to the US.

What's hot about this deal is who Izecom’s CEO is. I probably shouldn’t have used the word hot, because Izecom’s CEO is a woman… but I suspect she’d probably rather I called her hot, instead of a super geek… so let’s just say both terms apply.

GENIUS DEFINED

Izecom’s CEO is Christine Karman. It’s hard to know where to start when writing about her.

But, try this quick vignette on for size. When Karman was in the US last year, she gave a brief talk in Palo Alto before a group of people looking to invest in software firms. Apple founder Steve Wozniak made a point of sitting in on her presentation.

Okay, maybe that’s not enough evidence of super-geekdom for you. How about this, then? Back in 1991 Karman created a program called Aepax, for Aegon, one of the world’s largest life insurance and pension companies. The Aepax program, still in use to this day, automatically underwrites insurance policies.

I am told that Karman brought the project in over budget, so she didn’t get a pay raise that year. Wild when you consider that her (former) company has gotten 25 years of use from that program.

On the upside, around 1994 Karman left to form her own company, which was funded by an Aegon subsidiary.

DAVOS and MIT CONNECTIONS

In 2001 Karman was named as a technology pioneer by the World Economic Forum, which you’ve probably heard of because of the famous, high-rollers, world-leaders and business-titans who attend its annual meeting in Davos, Switzerland.

In 2002 and 2003 Karman was a judge at what many people consider the Genius Super Bowl – the TR100 Symposium.

It’s sponsored by the Massachusetts Institute of Technology’s Technology Review. TR100 is where, each year, 100 innovators, 35 years old or younger, show off new technologies that MIT’s Technology Review considers as poised to make a dramatic impact on the world.

Again, Christine Karman was a TR100 judge for two straight years.

THE IZE HAVE IT

That’s also the time when Karman founded Izecom.

And that leads us back to Izecom’s encryption and security product. I am told it’s one of the most demanded email encryptions programs for European law firms. I doubt their attorneys are any more paranoid about their work product than are their US brethren.

Izecom’s email security and encryption product also commands the leading market share in the Netherlands for the health care services and health insurance industries.

The product is supposed to be vastly superior to what US corporations use… which is what, I suppose, you’d expect from a company led by a World Economic Forum “technology pioneer.”

In fact, Izecom’s Chief Technology Martijn Brinkers is downright blunt about his product’s superiority.

“Izecom’s Izemail Gateway is far ahead of the competition and we are continuing to expand the gap; shortly we will introduce our solution for email encryption for PDAs,” he said in a media advisory released this afternoon. “Based upon positive customer feed back we continue to roll out new features such as increased integration between their email and their identity management systems.”

JUMP ON FRVT

But, Izecom is privately held.

So, FutureVest snagging a controlling interest in Izecom and bringing it to the US is why it’s time to load up on FRVT. It tells me FRVT, after two years of getting its ducks in a row, is ready to roll.

I think it’s learned a lot from its CPHC and SLNN deals. Now, it looks to want to acquire the majority in private companies… fund them… and watch the growth fly to FutureVest’s top and bottom lines.

In the coming years Izecom should have a nice effect on FRVT’s revenues. Once things are rolling you could even expect FRVT to spinout Izecom as a public company.

If that happens, as an FRVT shareholder, you’d get free shares in Izecom in the way of a dividend.

EYE ON CHINA

FutureVest’s refined strategy is also likely why its CEO, David Goddard, is in China… my guess is that he’s doing a private deal that adds some significant value to FRVT. After all, the Chinese fall over foreigners who are in China to help it grow and not just make a quick buck.

And, don’t worry about FRVT being on the Pink Sheets. Remember, these guys are the honorable group that offered to take CipherPass shares off your hands, for FRVT shares, valued at your initial CPHC buy in. And, I know FRVT has its eye on a major listing – that’s always been in its plan. With the Izecom deal you can bet that plan is moving forward fast.

FRVT looks to be a $5 stock in 18 months, maybe faster. These guys know what the hell they are doing – a rarity on Wall Street today.

I am fine with you loading up. Lynn and I will wait until Friday before we increase our small FRVT stake, just so you know everything here is on the up and up.

I rarely am this emphatic, but I am convinced that sometime during the next year or so, you will look back with regret should you not take at least of taste of FRVT sometime soon.

The Izecom deal is just the start… buy FutureVest (FRVT.PK) up to $3, and don’t forget to use a limit order and work your way up there…over days… not hours.

See you later this week if there's anything big happening with other AB portfolio companies - though everything looks fine today.

Andy