L.A. firms bring investment road shows to Internet.

Securities underwriters and their clients may be racking up fewer frequent-flier miles in the years to come as more companies attempting to raise capital put their "road shows" on the Internet.

At least that's the hope of Los Angeles-based investment advisory firm Alan Stone & Co. and Internet design and marketing firm Kanakaris Communications, which operates out of Malibu.

The two firms are teaming up to create "Internet Roadshows," a service that allows executives of public or soon-to-be-listed companies to interact with stockbrokers. analysts and investors on a real-time basis over the Internet.

The service is in the final phase of development and the partners say they plan to publicly announce the product this month.

Internet Roadshows is the latest of several investment-related online innovations coming out of Los Angeles in recent months.

The first brokerage to take a stock public through the Web is located in Los Angeles (W.S. Gallagher & Co. Inc.), as is the first company to use a brokerage to do so (Netter Digital Entertainment Inc. of North Hollywood).

Los Angeles investors also have embraced online trading and online securities research to a much greater extent than investors in other parts of the country.

So news that two L.A.-area firms are behind Internet Roadshows comes as little surprise.

Companies wanting to make their presentations to investors via Internet Roadshows can choose to go into a studio, or have a production team come to their corporate offices to have the presentation taped.

Once recorded and edited, the audio/video presentation would be shown on the Internet via a real-time video feed. The presentation would be played on Kanakaris' existing Web site, Financial Super Channel, at a pre-determined time and could be accessed by anyone who had been given a valid password by the company. The presentation would then be followed by a real-time question-and-answer session with corporate officers.

Audience members could also download the presentation for viewing at a later date.

The idea of putting corporate presentations on the Internet is not new. The Small Business Administration operates a Web site called Ace-Net, which allows qualified investors to access the corporate records of companies seeking to raise capital.

Stone and Kanakaris, however, believe their service will be differentiated from other corporate information currently available online by its more sophisticated technology.

"Nobody is doing it with this level of technology. We want to do what Michael Bloomberg did when he built his system," said Alan Stone, managing director of Alan Stone & Co., referring to the Bloomberg news wire, which revolutionized the real-time business news industry in the 1980s.

Internet Roadshows will employ Microsoft Corp.'s NetShow technology, which the principals claim will allow the viewer with a modem speed of 28.8K or higher to view the presentation. NetShow software can be downloaded free from the Microsoft Web site.

Meanwhile, Kanakaris Communications last week announced that it had appointed Lily Kanter, a senior executive at Microsoft Corp., and Alan Jones. a Morgan Stanley investment banker, to its board.

"No other Internet content/commerce company has a more powerful board than us," said Alan Stone in the announcement.

Kanakaris said a number of the biggest clients of his marketing firm have expressed an interest in using Internet Roadshow to reach investors, but he refused to name which ones.

Kanakaris said his clients include Ford Motor Co., AT&T and Apple Computer, while it is in strategic alliances with Microsoft and America Online Inc.

Stone, who currently represents mostly small to mid-sized high-tech firms, said he expects all of his clients to employ the Internet to some degree when raising capital in the future.

One company that plans to use the service is New Front Media Inc., based in Boulder, Colo. The CD-ROM and video disc publisher is in the process of going public.

The company's Chief Executive Mark Kreloff, who was in New York last week conducting a traditional road show, says using the Internet makes sense from a time-management point of view.

"I've been conducting this road show for a month and a half. If there is a better way to do this, I'm open to it," he said. "Most of my presentations take only 10 minutes, but I spend 45 minutes on the road getting there. Then there is the time I have to spend away from the office."

Investment bankers doubted that the Internet would ever fully replace the traditional road show.

"So much of investment banking is relationship-based," said Eduard Bagdasarian, partner at Brentwood-based Barrington Associates. "You want to have the investment banker in the room so he can look the CEO in the eye. That's the only way you will get a major investment."

UBS Securities analyst Mike McMahon agreed that there is no substitute for face-to-face meetings with investors.

"There is a certain dynamism created when people meet in a room. It's by far the easiest way to judge other people's interests." he said.

Beyond the staged presentations, most of the big deals are made during private negotiations with key investors. Internet communications would be a poor substitute for such meetings. McMahon said.