Bear Stearns Introduces e-volve, a Comprehensive Look At How the Internet Will Affect Every Aspect of Business.

Business Editors

NEW YORK--(BUSINESS WIRE)--January 31, 2000

Developed by 77 analysts, the report highlights top Internet plays

and will kick off a 10-week marketing campaign

As the Internet economy enters a new phase of growth, Bear Stearns is launching the next stage of its Net-related research effort. The first salvo of this campaign is the release of e-volve: Dot-com and Beyond, a comprehensive report featuring contributions from 77 analysts in Bear Stearns' equity research department. e-volve is designed to provide investors with an indispensable operating manual for the new economy. &uot;It has become clear that the Internet will soon pervade all aspects of business. That is why we felt it was imperative that we help our clients look at the Internet revolution from every angle possible,&uot; said Kay Booth, Bear Stearns' Director of Global Research.

In the report, each analyst assesses the impact of the rise of the Internet on his or her industry and tracks what paths the resulting changes will take in the coming years. The analysts also identify which stocks they think will benefit most from the expansion of the Internet. e-volve appraises the Internet in terms of overall strategy and features a fold-out chart that provides a complete anatomy of the Internet. The debut of the 340-page publication will kick off a 10-week marketing campaign consisting of panel discussions, conference calls, and other initiatives designed to help investors take advantage of the new capabilities that the Net is creating.

The Internet Advantage

The report draws a number of key conclusions with regard to how companies can prosper in the Internet age. The analysts detail the significant opportunities that are opening in business-to-business e-commerce and the tremendous cost savings that can be realized by using the Internet to manage the supply chain. The report also identifies the chief themes that best describe the evolution of the Internet and its impact on the business world, including:

- The importance of brands

- The more effective use of extensive databases

- The move into digital distribution

- The massive buildout of the Internet infrastructure expected over

the next few years

&uot;Regardless of the industry, many common themes ran throughout the dozens of reports the department compiled,&uot; commented Elizabeth Mackay, Bear Stearns Chief Investment Strategist. &uot;If you are looking to pick successful stocks, it makes sense to focus on companies that fit these characteristics. In addition, it is becoming clear that there are a number of ways to bet on the Internet without just buying companies that end in dot-com.&uot;

Every Business an Internet Business, Every Analyst an Internet Analyst

The uniqueness of e-volve may be most evident in the reports developed by analysts who do not normally focus on technology. Those analysts, who cover areas such as aerospace, forest products, lodging, and education, to name a few, provided varying and interesting perspectives on the Internet evolution. A few of the highlights found in e-volve:

- Environmental Services Analyst Steve Binder writes that while the

Internet has yet to affect the garbage industry, it is only a

matter of time before waste management companies will use the new

technology to help them more effectively manage their collection

routes-- maximizing collection schedules in much the same way

that airlines use Internet bookings to fill empty seats.

- Health Care Analyst John Rex points out that by using the

Internet, HMOs can cut their costs for processing paper claims

from $3.00 each to $0.50 to $0.70. He also believes health care

organizations will one day enhance their earnings by selling

their databases to pharmaceutical companies, which will use the

information for drug research and marketing.

- Chemicals Analyst Jeffrey Peck believes that some chemical

companies will profit from the Internet by selling patents and

technologies they do not plan to use to other companies online.

- Paper &Forest Products Analyst Linda Lieberman believes the

Internet will have a mixed effect on the paper companies.

Newsprint and coated paper demand could drop as online media and

online catalogs become more prevalent. However, demand for

containerboard, which is used to create corrugated boxes, should

rise as companies engage in more e-commerce and must ship

products to consumers.

- Mortgage Finance Analyst David Hochstim suggests that the

Internet could increase home ownership by making mortgages more

available and reducing the costs both for lenders and borrowers.

In conjunction with automated systems, which more accurately

assess credit risk, the Internet, according to the report, could

allow more people to qualify for loans and/or borrow larger

amounts.

- REIT Analyst Ross Smotrich points out that even virtual companies

will need real offices. According to the Bear Stearns analyst,

many Real Estate companies are blending &uot;clicks with bricks&uot;--

providing office buildings with high bandwidth voice and data

communication capabilities.

- Education Analyst David Nadel speculates that on-line education

could pose a real threat to the existence of many

less-prestigious post-secondary schools. On-line schools, he

believes, may end up taking students from traditional

universities and forcing traditional educational institutions to

lower prices in order to compete.

- Pharmaceuticals Analysts The Internet could lead to greater

medical breakthroughs. Joe Riccardo and Scott Shevick believe the

Net will allow drug companies to centralize their research and

development efforts and to streamline the extensive documentation

needed to file drug approval applications. In addition, the Web

will aid companies in enrolling patients in clinical trials,

monitoring their progress, and collecting valuable information

concerning drug safety and cost effectiveness.

- Gaming Analyst Jason Ader estimates that on-line gambling sites

number more than 600 and predicts their strong growth will

continue, despite legal hurdles. However, Ader believes that

on-line wagering will be an addition rather than a substitute to

traditional &uot;bricks and mortar&uot; casinos.

- Metals Analyst Anthony Rizzuto believes the Internet could reduce

the demand for copper wire and cable used for phone lines. As

fiber optic cable and wireless Internet services become standard,

metal producers could find themselves with too much supply and

not enough demand.

In addition to insight on the various industries, the Bear Stearns analysts discuss specific companies they believe will benefit from the changes. &uot;This report highlights how concurrent advances in bandwidth and bits are moving beyond dot-com companies and are fundamentally restructuring practically every industry,&uot; commented Bear Stearns Computer Analyst Andrew Neff, who, along with Broadcasting and Entertainment Analyst Raymond Katz, helped coordinate the report.

More Than Just a Report

The research report and the Internet-related stock picks are just the starting point for Bear Stearns' clients. The research department is complementing e-volve with various programs that will help investors better utilize the study. Each week for 10 weeks, Bear Stearns will unveil an e-volve hot stock pick of the week, selected from the pool of 84 stocks mentioned in the e-volve report.

Each week the research department will also hold an e-volve virtual conference call. Broken up by sectors, including technology, media and basic industry, analysts will expand upon their views that are documented in the report. In addition, Bear Stearns will conduct an e-volve panel of the week designed to focus on the major themes in the report. During the e-volve panel, analysts will discuss the most creative, counter-intuitive, and provocative ideas developed during the research process.

Finally, every other week there will be an e-volve external panel where company executives, venture capitalists and consultants will be called upon to embellish the report's findings. &uot;We thought it was important to give our clients more than just a written report,&uot; said Mitch Jennings, head of Bear Stearns Global Equity Research Sales. &uot;By hosting conference calls and panel discussions, we will be able to provide our clients with a wealth of information to help them capitalize on the Internet revolution.&uot;

To learn more about e-volve, or to contact Bear Stearns, please visit our Web site at www.bearstearns.com.

Founded in 1923, Bear, Stearns &Co. Inc. is a leading worldwide investment banking and securities trading and brokerage firm, and the major subsidiary of The Bear Stearns Companies Inc. (NYSE:BSC). With approximately $22.2 billion in total capital, Bear Stearns serves governments, corporations, institutions and individuals worldwide. The company's business includes corporate finance and mergers and acquisitions, institutional equities and fixed income sales and trading, private client services, derivatives, foreign exchange and futures sales and trading, asset management and custody services. Through Bear, Stearns Securities Corp., it offers professional and correspondent clearing, including securities lending. Headquartered in New York City, the company has over 10,000 employees located in domestic offices in Atlanta, Boston, Chicago, Dallas, Los Angeles, Puerto Rico and San Francisco; and an international presence in Beijing, Buenos Aires, Dublin, Hong Kong, London, Lugano, Sao Paulo, Shanghai, Singapore and Tokyo. For additional information about Bear Stearns, please visit our Web site at www.bearstearns.com

Any recommendation contained in this report may not be suitable for all investors. Moreover, although the information contained herein has been obtained from sources believed to be reliable, its accuracy and completeness cannot be guaranteed. Bear Stearns may make markets and effect transactions, including transactions contrary to any recommendations herein, or have positions in the securities mentioned herein (or options with respect thereto) and may also have performed investment banking services for the issuers of such

securities. In addition, employees of Bear Stearns may have positions and effect transactions in the securities or options of the issuers mentioned herein and may serve as directors of such issuers. Copyright (c) 2000. All rights reserved by Bear, Stearns &Co. Inc.