Potential commercial opportunities for ENW ,
 Apologies for my Jerry McGuire-type long winded Memo, but I wanted articula=
te=20
my thoughts in detail to avoid confusion.  We should get together to discus=
s=20
these thoughts if we all see some opportunities here....

Rahil
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ENW's Goals:
To leverage the brand value residing in EnronOnline to help brand and creat=
e=20
value for Enron's other e-commerce initiatives (DealBench, ClickPaper,=20
CommodityLogic, etc.).
To find new ways to further develop and commercialize ENW's existing=20
platforms - i.e. use them to generate greater revenues and/or enhance their=
=20
intrinsic value in the market.
To strategically develop new businesses using Enron Net Works' core skills.=
 =20
This should/will lead to medium-longer term revenues on a sustainable basis=
.
To generate short-medium term revenues to meet targets and allow breathing=
=20
room for longer term initiatives.

Landscape:
Few days ago, I came across this blurb on one of the online news updates=20
(Upside.com):
Meanwhile =01( British Telecommunications' (BTY) internal incubator Brights=
tar=20
announced Wednesday an agreement to work with U.S. based technology operati=
ng=20
company incuVest, a $100 million holding company, to create companies in th=
e=20
communications field based on British Telecomm's 13,000 patents.
=20
Thoughts:
BT's 13,000 patents are probably mostly technological patents or process=20
related patents.
No organization has the "Bandwidth" (i.e. resources) to commercialize this=
=20
many patents by itself in a short period of time.  Doing it all themselves=
=20
would mean having to work on commercializing these patents in a sequential=
=20
manner - which could take years.
Given the nature of these (and all other) patents, time-to-market is critic=
al=20
since disruptive technologies can render these assets valueless.
Even companies with adequate resources, won't have all the skills required =
to=20
develop new businesses, since e-platforms require commercial, technological=
,=20
legal, regulatory, and development approaches that span across various=20
countries and industries.
Hence, it would be in BT's best interests to try and:
Focus on commercializing only the select patents that they think may offer=
=20
them most value, and in which they have a truly developed skill-base.
Monetize the remaining patents by giving them away in exchange for equity, =
or=20
by selling them.  This will also help raise money to re-deploy towards=20
commercializing the higher value patents.

Pitch:
Enron Net Works would be the perfect partner/solution provider for BT and=
=20
others to:
Evaluate the potential commercial value of BT's technological and process=
=20
related patents so they can decide to whether incubate them internally or=
=20
monetize them.
Auction-off patents which BT considers to be less valuable via Deal Bench=
=20
(which has data rooms capabilities to showcase patent specific information =
as=20
well as an ability to host several clients).
Commercialize patents (with BT and or other people who participate in the=
=20
auctions) by providing a well-branded business development infrastructure=
=20
(e.g. "from the company that developed the worlds biggest e-commerce site i=
n=20
record time").

Benefits to ENW:
Generate short-term revenues from DealBench's auction/data-room platform=20
while branding it in the longer run.
Gain access to ideas and partners with whom we can develop new opportunitie=
s.
Branch out into servicing other companies that hold proprietary information=
=20
(patents, etc.) like Lucent Technologies, Xerox, and others.  Companies lik=
e=20
this have been battered in the equity markets recently and would be open to=
=20
ideas which helps them monetize some of their intellectual assets to appeas=
e=20
the share-holders.
Have secondary benefits of knowing what's being developed in the markets (b=
y=20
plugging into a network of people and companies who've bought these patents=
=20
and are commercializing them).  This may allow us to invest in new ventures=
=20
that hold promise when the market outlook improves in the future.

Why Enron Net Works?
Our experience across industries and geography allows us to leverage our=20
experiences to evaluate commercial opportunities.
Once the value has been identified, we can use DealBench to monetize unwant=
ed=20
assets in the broader market.
We have experience and the support infrastructure on which we can rely to=
=20
minimize the development time (legal, tax, regulatory, technological, and=
=20
commercial support) just like we did with EnronOnline.
Having industry and development experience has given us better skills to=20
develop new opportunities compared to consultants and incubators (who=20
typically don't have these "real-world" business experiences.
Core skills include:
Evaluating technology and implementing it in the most scaleable manner,
Valuing the technology and opportunities from a financial standpoint,
Commercial and market based insights which are increasingly valuable in the=
=20
e-World where everything is getting commoditized due to decreasing=20
interaction costs and increasing transparency.  ENW can quantify the value=
=20
chain in these new industries.
Enron's overall ability to manage risks in an array of commodity markets.

Steps Forward - dedicate some resources to:
Understand what it takes to do this and analyze whether we truly have the=
=20
skills and resources to execute on this (e.g. Is DealBench built for this? =
=20
Do we have the right skills?, etc.).  We may also have to ally with some of=
=20
the technology-specific skills within EBS.
Identify the optimum number of new opportunities that can be valued,=20
auctioned and/or developed by ENW.  This number may be only looking at 5=20
opportunities at a time or auctioning-off no more than 100.  This is okay=
=20
since we don't want to over extend ourselves (since our credibility is at=
=20
stake).
Identify top-level contacts with each of these organizations (BT and their=
=20
partner incuVest, Lucent, Xerox, etc.) whom we can sell on our idea.
Develop a contingency plan if the likes of BT, Lucent, and Xerox don't buy-=
in=20
due ENW not having done similar things before.  In this case, we could mine=
=20
the patent database to identify the owners and approach some of the smaller=
=20
shops (or other Mom-and-Pop owners) to buy and develop these things.  This=
=20
will allow us to develop an internal process and also develop a "history".

If the patent holders have qualms about accidentally selling some patents=
=20
with significant value (like Xerox has done in the past), we can structure=
=20
creative contracts which allow them to share in the upside by retaining a=
=20
certain percentage of the future earnings of the patent buyers (somewhat li=
ke=20
a portfolio of equity in start-up companies).  Enron can even help provide=
=20
liquidity for these "portfolios" in the future.

Let me know if you have any questions/ideas.

Regards,
Rahil
3-3206
harry.arora@enron.com, greg.piper@enron.com, rex.shelby@enron.com, 