iSophia's COMPANY OF THE YEAR: Opsware (NASDAQ: OPSW).

Marc Andreessen's 2^nd Billion-Dollar Idea. By Natalie Wynne Pace, CEO, iSophia

Marc Andreessen Chairman, Opsware Inventor of the Browser, Netscape

Marc Andreessen (Netscape, Mr. Browser) strikes gold again with super cyber server software designed to disable defunct (or illegal) software, deploy worm patches at the click of a mouse and other solutions that shave hundreds of manpower hours off of Fortune 100 companies' technology budgets, all while increasing efficiency, performance and eliminating human error.

Opsware's first 2004 award, Company of the Year, is being given by our financial media organization, iSophia, but its all-star reputation is becoming quite the buzz among corporate IT departments and technology analysts. American Technology Research says, "Opsware has more potential for significant, sustained growth than any other software company we know of, bar none. Simply put, we believe it deserves to be placed in Ôthe next big thing' category." Electronic Data Systems' CEO (NYSE: EDS), Michael Jordan, has called Opsware a "critical factor in our ability to move forward." Hewlett-Packard (NYSE: HPQ), now the world's 3^rd largest provider of IT services, is an authorized partner of Opsware, offering Opsware software and services to its global clients, opening up what American Technology Research estimates will become an $11.3 billion market by 2006 . You may not have heard of Opsware yet, but chances are that by this time next year, the company will have made a few more high-profile headlines. Hewlett-Packard and Electronic Data Systems Bank are certainly banking on Marc Andreessen's 2^nd Billion-Dollar Idea.

Opsware's growth has come about quietly over the last three years, as they contracted strategic partnerships with Electronic Data Systems and Hewlett-Packard, and sold their automated data center software to a laundry list of marquee Fortune 100 customers. To date, Opsware's client list includes a Who's Who of top corporations on Wall Street, including Electronic Data Systems (NYSE: EDS), Northrop Grumman (NYSE: NOC), Hewlett Packard (NYSE: HPQ), Procter & Gamble Co. (NYSE: PG) , Altria (NYSE: MO), the Defense Department and the UK government, to name a few. With data center service corporations, like EDS and HP, hawking their software, Opsware's list of new clients may start giving the shipping department a bit of a challenge. American Technology Research writes, "We believe Opsware is on the cusp of exploding growth that will meet or exceed 90% for at least the next two years with potential for significant upside even to these seemingly lofty expectations."

When Opsware was first featured in the iSophia's December 15, 2002 issue, the share price was trading at under two bucks and the company was just months away from a NASDAQ delisting. This year, Opsware's share price has gone as high as $9.00, and the company is, in the words of Ben Horowitz, "throwing off cash," having made its first acquisition--Tangram Enterprise Solutions. Marc Andreessen, feeling confident that Opsware will become THE independent company in ADCs (automated data centers), plans to do more software acquisitions over the next three to five years. According to Andreessen, currently "there are opportunities to buy great technology at the right price."

Were the iSophia reporters psychic last year? Not really. It doesn't take a genius to figure out that the guy who invented the Web browser at age 23 and his best friend, a guy who employees would walk through fire for, wouldn't be pouring their own money into a business during the worst market downturn of recent memory if they didn't believe they were onto the next big thing, even if no one else could figure out what the heck they were selling. So, just what is Opsware? Why does Hewlett-Packard call their relationship "a winning combination," while Electronic Data Systems' CEO, Michael Jordan, admits that Opsware's alliance is a "critical factor" in EDS' recovery plan?

It's just not that easy to explain. When asked to give Opsware's elevator pitch, Opsware's CEO, Ben Horowitz, came back with a paragraph.

Opsware's software product is difficult to sum up in a snappy sentence, but the IT savings tend to catch a CEO's ear, as does the mention of exterminating worms, viruses and hackers. As Andreessen says, "The Microsoft worm brought down Microsoft's own data bases. You have the vendors themselves running their own software unpatched! It's not that they're not smart." So, errr, if they're smart and they had the cure in their hands, why didn't they swallow the antidote before the attack, or at least right after? With one server, according to Marc Andreessen, it's easy to do. With 50,000 servers, it's really hard to do. "Patches come out every week. Every time you install a new patch, you run the risk of destabilizing the software that is running. Our software deploys that patch out automatically."

Opsware also keeps corporate web sites up and running during times of extreme increases in traffic, such as occurs during the holidays. Opsware's software (in use by Loudcloud at the time) kept news sites like FoxNews and USAToday running on 9.11.01, when the number of visits to these sites increased by the power of ten, by allowing the company to scale up the number of servers supporting those sites quickly and automatically. (The server provisioning also scales back efficiently when things return to normal.) More recently, EDS used Opsware to automate the deployment of a patch to keep EDS' clients up when the Microsoft SQL Slammer worm took down even Microsoft's systems. Rather than patching each server manually, EDS used Opsware automation to patch numerous servers simultaneously. As a result, companies need fewer people maintaining servers, which reduces labor costs significantly. Additionally, downtime from operator error is improved drastically, improving the quality of the customer's experience. As MetLife's Vice President, IT, puts it, Opsware frees "associates to focus on areas that better utilize their skills and expertise."

Imagine an automated cyber handyman (Opsware) that sweeps up the outdated documents and applications messes of the 90s, deploys worm patches across thousands of servers in thirty minutes, standardizes software upgrades, allocates additional servers for excessive web-hits during holiday seasons and rolls back in the aftermath, disables defunct or pirate software, like LimeWire and Kazaa, and all this while REDUCING technology budgets for mega-corporations by MILLIONS EVERY year. "EDS reports saving $100 million each year as a result of our software," says Ben Horowitz. American Technology Research notes that an initial investment in Opsware pays itself back within seven months, and, for big corporations, continues an ongoing return of up to $20.5 million per year, with just $2 million/year maintenance costs, by driving down the administrator to server ratio.

Needless to say, when high performance meets massive cost savings, the clients tend to be pretty happy. It's not surprising that Opsware receives "glowing reports." What is a little surprising is that the company, to date, doesn't have any standout competition. When asked about other companies trying to steal away a portion of Opsware's market, Ben Horowitz says simply, "Good luck." "One thing that I do know is how hard it was to build Opsware," Ben says. "I'm not concerned about someone trying to do itÉ We get great feedback from industry analysts and customers. We have a healthy lead and we're highly differentiated."

It's not a pretty job, but in a world of worms and hackers, someone's got to do it, and that someone could be sitting on his 2^nd billion dollar idea. In fact, if Opsware does for cyber automation what the assembly line did for factories, Marc Andreessen's second cutting edge technological invention could stomp all over the $10 billion price tag of his firstÑNetscape. Of course, Opsware has $9.5 billion to go to get there, but this is just year one into the return of corporate capital spending, and each time a worm takes down a corporation's IT functionality, you can expect more and more spotlights to be cast upon the one company that gets worm patches deployed across tens of thousands of servers in under thirty minutes. Hewlett-Packard is banking on it, as is Electronic Data Services, Marc Andreessen and Ben Horowitz. Yes, the rumors are true, insiders did help buoy up the sinking Opsware (then, Loudcloud) $6.00 share price during the ill-timed IPO back in March of 2001.

So what could put the screws on this golden opportunity? Hasn't Andreessen been characterized as the "enfant terrible," the guy you have to keep away from employees?

Let it be known, Marc's the famous guy, the visionary, the chairman, but Ben's in charge. "Somebody has to be in charge," Marc says. "For us, that's Ben." Both men characterize their relationship as friendship based in trust, communication and respect, and the ability to process information with an "engineer's mind." Decisions are arrived at empirically, based upon data more than emotions. Some very hard calls had to be made over the past three years to keep Opsware alive, business choices that speak volumes on the commitment, intelligence and prescience of Andreessen and Horowitz. Any wrong move might have sunk the company, as so many other technology companies before them, including Digex, Exodus, Data Return and Digital Island. In hindsight, the judgment to do a 3^rd equity round when insiders were pushing for a debt round likely kept the company from forced insolvency, but it was bringing in Electronic Data Systems last August 2003 that truly saved the day.

When Opsware, formerly Loudcloud, was burning through $12 million a month and saw its share price sag to 39 cents, the cash bleed had to be clogged and FAST. It wasn't just a matter of laying off staff. It required rethinking the entire business model. It required contacting their most formidable competitor in the managed services business with an unusual proposition. Not just, "Want to buy us out," but, "Want to buy us out AND keep us afloat by licensing our proprietary software?" The end result of that deal was that Electronic Data Systems bought the managed services division of Loudcloud, Loudcloud became a software company called Opsware, and $65 million exchanged hands, with a promise of another $52 million in licensing fees for the next three years.

In 2003, EDS was responsible for 90% of Opsware's revenue, though with the addition of Hewlett-Packard as a strategic Opsware partner, that percentage should begin leveling out as early as 2004. Certainly, admits CEO, Ben Horowitz, "It's the most relaxed I've felt going into a year for about four years." Good news for Opsware and Opsware shareholders. Bad news for Sunnyvale, California residents, who'll be listening to happy Ben cruising around in his Lincoln Navigator, with the loudest sub-woofers Andreessen's ever heard, blaring rap music.

Although Ben is more apt to quote rap artists in his management meetings, he is up on his Schumpeter, which, he believes is another reason to believe that NASDAQ's return this time around may be more stable and enduring. In an interview last year, Ben had this prediction:

Investors who believed Ben's NASDAQ: the Sequel Theory and bought Opsware at its 39-cent share price have seen up to 20X returns.

Can Marc Andreessen's little $523 million dollar unknown become the dominant corporation in a market expected to expand to $11.3 billion by 2006, according to American Technology Research?

"The guy isn't just a smart guy in his sector, like Ben and I," Jonathan Daniel, co-founder of BigChampagne.com and brother of Ben Horowitz, says about Marc Andreessen. "He invented the Web browser when he was 23. The guy is a genius." Let's not forget that Marc Andreessen, the inventor/genius who brought the world into the 21^st century with the point and click browser, also CAPITALIZED upon his invention (something many inventors fail to do), reportedly pocketing almost a billion of the $10 billion Netscape sale to AOL. It's hard to imagine a company with more genius than Marc and more business acumen and employee finesse than Ben Horowitz. Now, with the home-run hitting sales and distribution players of Electronic Data Systems and Hewlett-Packard batting on the Opsware team, it doesn't seem too risky to predict pennant years for Marc Andreessen's 2^nd billion-dollar idea.

To read more about Opsware, be sure to check out the feature interview with Opsware Chairman, Marc Andreessen, and CEO, Ben Horowitz, featured below.

Full Disclosure: Natalie Wynne Pace owns a small number of Opsware's 81.09 million outstanding shares (630 shares as of press date).

Success Secrets of CEOs features an exclusive interview with DOT COM SURVIVORS:

Ben Horowitz CEO, Opsware

Success Secrets of CEOs features DOT COM SURVIVORS: Opsware Chairman, Marc Andreessen, and Opsware CEO, Ben Horowitz. These guys launched a successful technology IPO in April of 2001, when NASDAQ was a four-letter word and IPO's were a nostalgic memory of the glorious, roaring 90's past.

Everyone knows Netscape and Marc Andreessen, the boy genius who invented the Browser, but few people, even financial professionals, have heard of Opsware (NASDAQ: OPSW). Many who remember Marc Andreessen's ill-timed 2001 IPO, Loudcloud, presume that Loudcloud failed. But Loudcloud didn't fail. It became the software company Opsware, an amazing 2001 IPO dotcom SUCCESS story that swerved off the road to ruin, from $12 million monthly cash burn last year, to cash positive this year. Opsware has emerged quite the technology phoenix, moving into acquisitions and expansion stage, with its December 2003 purchase of Tangram Enterprise Solutions and its strategic partnerships with Hewlett-Packard (NYSE: HPQ) and Electronic Data Systems (NYSE: EDS).

If you still aren't compelled to believe that Opsware has any chance of being as important a company as Oracle, or even Netscape (Andreessen's first billion-dollar idea), consider that Opsware has seen up to 20X returns on share price in the last twelve months, and is currently utilized by some of the wealthiest corporations and nations on the planetÑincluding Electronic Data Systems (NYSE: EDS), Hewlett-Packard (NYSE: HPQ), Northrop Grumman (NYSE: NOC), Procter & Gamble Co. (NYSE: PG) , Altria (NYSE: MO), the Defense Department and the UK government,. American Technology Research says Opsware "deserves to be placed in Ôthe next big thing' category that investors have been searching for since the dot.com collapse."

Opsware is headed up by Ben Horowitz, CEO, under the aegis of Marc Andreessen, Opsware's celebrity visionary. Though this may be the first time you're hearing about Opsware, if I were a betting gal, and I am (see full disclosure below), I'd place Marc's second appearance on the cover of Time magazine on or before year-end 2007, just about the time when I'm taking outer-worldly profits on my Opsware investment. (If nothing else, at least you know I'm a gambling gal, making such a lofty statement as that.) For more information on why Opsware is iSophia's COMPANY OF THE YEAR, see the feature article above.

NatalieÑHere I am telling the world that Opsware is the Company of the Year, and most people haven't heard of your company and don't have a clue what product or service you sell. What's the simple, elevator pitch of Opsware?

Ben--As companies move to web-based computing they get a lot more servers, which are difficult to manage and control. All kinds of problems can arise--security, quality and worms. There is a huge cost to manage all of the new software and equipment. Opsware helps to systemize, rationalize and improve all of that by automating the data center. Think of it like automating an auto manufacturing shop. There are huge benefits, but it is a comprehensive effort. As you go in, you have to have a deep level of engagement. You can't sell it over the phone.

NatalieÑStraightening up, cleaning up and locking up. Sounds to me like cyber housecleaning. Marc, can you pare Opsware's niche down to a sentence?

MarcÑWe automate these modern data center markets, literally hundreds of thousands of servers and complicated software, making things run much better and faster overall.

Natalie --With significant cost savings to the mega-corporations that you serve, right?

Marc--Better faster cheaper.

BenÑElectronic Data Systems (NYSE: EDS), the company that bought our managed care business in June 2002 for $63.6 million, and licensed Opsware software for three years for $52 Million, reports saving $100 million each year as a result of our software. EDS plans to roll out Opsware on 50,000 servers, over 154 data centers, to achieve these cost savings.

Marc--Organizations spend hundreds of hours and hundreds of thousands of dollars installing and implementing huge servers, new web sites and applications. They have to continue to do that, but they also have to clean up the mess of the Ô90s. There is a need to cut costs, improve security and build a platform for the next 5-10 years. There is a constant need for new systems and new software. Companies use Opsware to clean up, as well as to launch and support the new platform. For people who spend a lot of time following where the technology goes, they understand what we do.

NatalieÑOpsware has been called "nirvana" by the Steve Bozzo, MetLife's CIO, and "an antidote to the chaos of the modern data center," by Paul Sloan, writer, Business 2.0. Can you give us a concrete example of the benefits of Opsware?

Marc-- Opsware (in use by Loudcloud at the time) kept news sites like FoxNews and USAToday running on 9.11.01, when the number of visits to these sites increased by the power of ten, by allowing the company to scale up the number of servers supporting those sites quickly and automatically. More recently, EDS used Opsware to automate the deployment of a patch to keep EDS' clients up when the Microsoft SQL Slammer worm took down even Microsoft's systems. Rather than patching each server manually, EDS used Opsware automation to patch numerous servers simultaneously. Using Opsware to automate IT operations such as server provisioning and patch management, companies achieve a significant improvement in their server to system administrator ratios, thereby reducing their labor costs. In addition, companies benefit from virtual elimination of downtime due to operator error, significantly improving the quality of their operations.

NatalieÑSo the Microsoft worm had an existing patch? Corporations, including Microsoft, could have protected themselves?

Marc--It turns out the major problem with viruses is that everyone has firewalls and anti-viruses, but they still get seriously damaged. The problem is never the case that the hacker has discovered a new defect or vulnerability. He is attacking a known vulnerability. The patch was likely issued two months ago. You're going to apply the patch next month, but he slips in there before you do it. Well, why doesn't everyone keep his system patched? With one server, it's easy to do. With 50,000 servers, it's really hard to do. Patches come out every week. Every time you install a new patch, you run the risk of destabilizing the software that is running. Opsware gives you that system. Corporations didn't need this five years ago. There weren't that many servers and these attacks weren't taking place. They need it now.

NatalieÑBut how does Microsoft (NASDAQ:MSFT) go down for a day, when they've already designed the fix?

Marc--You have the vendors themselves running their own software unpatched! Their own people had not applied the patch to their own servers. It's not that they're not smart. Our software deploys that patch out automatically. It's a great point of sales.

NatalieÑCould Opsware potentially be as big of an idea as the browser and Netscape?

Marc--Netscape sold out at the right time, and the numbers worked well. Netscape was worth $10 billion to investors off that deal. In new markets, often people sell out too early. Acquirers aren't willing to pay that much until it's proven. $30-$50 million dollar companies who sold out a year ago, in every case, sold out too early. Within a year, we increased our market capitalization to $600-700 million, which is a mistake by a factor of 10 to anyone who sold out too early. Our market is starting to form now. Even if our strategy is to sell out at some point, the right thing to do is to wait. The last company sold gets the best price, and often it isn't the best company. We hope all of our competitors get bought. Big companies almost always kill them. The mortality rate is almost 100%. Sun Microsystems bought Century Run. They just killed it. It was a spectacular system. When the software startup is not formed yet, and you put it into context with a big company, it's like Enron. Where did it go? We love when that happens. Our best-case scenario is that all our competitors get bought, and we're the only company left standing.

NatalieÑAfter the war you've been through for the past three years--launching the company in March 9, 2001, hitting a 39 cent share price last year, barely escaping a $12 million a month cash bleed which was leading the company toward bankruptcy (the fate of so many competitors), wouldn't a buy-out from your new partner, Hewlett-Packard, (NYSE: HPQ) be, perhaps, nirvana? I mean, surely IBM and Sun Microsystems are looking to compete in your market.

Ben--One thing that I do know is how hard it was to build Opsware. I'm not concerned about someone trying to do it. My advice to them is "good luck." We get great feedback from industry analysts and customers. We have a healthy lead and we're highly differentiated.

NatalieÑYes, okay, but what price could a corporation, say Hewlett Packard, pay to buy Opsware from you?

Marc--Our goal is to be a very successful independent company. There should be one very successful independent company in this market. We want to be that company.

Ben--We're not for sale. We've come a long way since Oki Dog. We're happy with the position we're in. We're looking to build a company at this point.

iSophia note: errr. Oki Dog is the horrible fast food, rot gut grill that Ben relied on during those lean college years, when the wallets were bare, before Marc's genius brought the Internet into the laps of users around the world and Ben began master-minding his plan to own the Raiders and open up the world's first Hip-Hop Hall of Fame.

NatalieÑYou've certainly come a long way from last year's 39 cents share price and possible delisting from NASDAQ. In fact, you've been making acquisitions of your own, expanding your own business model. Let's talk Tangram Enterprise Solutions. What inspired this year-end acquisition? Taxes? Increasing your customer base? Expanding your software functionality?

Marc--One is there have been a rising amount of software M&A [mergers and acquisitions]. M&A went on vacation. It was a combination of the buyers all unable to buy, or in a bad mood, and the sellers had over-inflated expectations of what their companies were worth. Companies were too expensive or worthless or both. The market has corrected. There is new technology out. There are opportunities to buy great technology at the right price. This [Tangram acquisition] is a great example of that. Other companies are shopping. We looked at 50-60 deals. We think this a great technology for a really good price. Over the next three to five years, we plan to do a few of these. We also picked up over 200 new clients, including 25% of the Fortune 100, with such marquee names as Marriott, Prudential, UBS, Unocal and Molex.

Natalie--What is Tangram's great technology?

Marc--It's like the flip side of what virus scanners do. Norton hunts down the 6,000 potential viruses you might have. Tangram hunts down the 30,000 software products you might have on your machine. The top corporations have hundreds of thousands of computers. Big organizations with 30,000-50,000 employees have 5-10,000 servers. Odds are in the 1990s they completely lost track of what they have or what it's running. How many copies of Oracle or Microsoft Office do I have? A lot of people, like KaZaa, are on my network. You can use the Tangram product, tell it what software to scan for and it will find it. It will let you stop it. If you want to prohibit people from using Kazaa, you scan it and outlaw it on your network and people can't run the program.

Software companies come in and do audits. You're licensed for 10,000, but you're running 15,000. Independent users aren't criminals necessarily, they're just doing what they think they should do to get the job done. Tangram allows you to know what your employees are doing. They haven't been aggressive about marketing, but we can do that. It was a great price. It cost us less than 2% of our company in terms of stock issuance in exchange for a really great technology.

NatalieÑLet's examine the competition. How close a competitor was Think Dynamics, a company that was recently purchased by IBM, and just how far ahead is Opsware positioned in technology? How do you plan to keep your competitive edge? Through R&D? Relationship building?

Ben--Think Dynamics was not really a head-on competitor. We have almost none of the same functionality. They're an adjacent company. The most complicated Data Center Automation or utility computing turns out to be automating the software stack that runs on these computers. We know this from our Loudcloud experience. We are far and away the highest value in the value stack. Think Dynamics is an interesting product that targets a less expensive, less important problem.

NatalieÑYes, but the fact that IBM purchased them, does that lend a name credibility that Opsware, even with superior product, can't match?

Marc--Most companies don't want to buy software from companies that are locked into hardware. Oracle is the software people use. BEA is the application server most people use. Companies like to buy important software from independent companies. That's been the case for 20 years. IBM used to have the complete lock on the industry. A company owned by IBM or SUN has a harder time selling than people think they would. It takes time to play out. Every time it happens, everyone says IBM will dominate but it never happens that way. These are really good companies. It doesn't say anything negative about IBM or Sun. They're both great companies.

NatalieÑAfter launching a technology IPO in March of 2001, skirting the rim of bankruptcy in 2002 and turning cash positive in 2003, you two could write the book on DOT COM survival strategies. Your deft navigation of Loudcloud and Opsware through such a difficult climate would indicate that you two could easily outperform the competition in easier times. What are your secrets? Do you look back and say, "We were geniuses for doing a 3^rd round of financing instead of debt offering? For selling out to our largest competitor? For becoming a software business?" If you'd turned in a different direction on any one of these pivotal moments, you might have lost your companyÉ

Marc--I don't know. An awful lot of successful technology companies ended up being in a slightly different market than they started out in. Microsoft started with programming tools, but came out with operating system. Oracle started doing contracts for the CIA. AOL started out as an online video gaming network. Intel was a memory chip vendor until 1985, for 15 years. The history of this stuff is that it often takes a while to figure out ultimately what the real market is. Adaptability is key. If you ask Bill Gates or Andy Grove, they say, you have to be able to adapt. You're launching into the unknown. You're introducing something new. You have very limited information. That, and be stubborn, extremely stubborn.

Natalie--Why?

Marc--The pressure you're under. You have to really want it to succeed. For example, when you're making a change, you have to go back to all of these people you made commitments to and explain that everything you explained before is completely off the table. Our stock price went from six dollars to 39 cents. You have to lay people off. You have to do all of these really hard things to do that. It's not that people can't intellectually do it. They can't emotionally do it.

Ben--I think that you have to be hardheaded. You can't listen to smart people telling you how stupid you are. It's always your fault, even if it's the environment or the markets have changed. Keep working and trying to figure it out. The customers loved the offering. Although we couldn't make it work on the services side, EDS can. We had the software to make that work. All the things you do to make your product good and make your customers happy, if you try hard enough and stick with it long enough you can get the value back.

Natalie--What happens when the IPO market prices the company at $6.00 a share, when earlier equity holders have paid $9.00?

Ben--The thing you always have to keep in mind is that it's all relative. Although the IPO was at $450 million and the C series was $700 million valuation, the rest of the market had fallen further. The relative performance of the company was just fine. If you talk to those guys [the C round investors], they'd say that they were pretty happy in Opsware because it outperformed everything else. They invested in management servers in 2001. That was a bad sector. They got a good return for the sector they picked. If they invested in Digex (bought by MCI), MFN (now Above Net), Exodus, Digital Island (merged with Sandpiper Networks), WorldCom, Williams Communications or any of those companies, they lost it all. Losing 30% is good in that context. On the other hand, if our value had gone down and the rest of the market had gone up, they would have been pretty sore at me.

NatalieÑSo, you stuck it out, and your stock price is back up to the IPO price of March 2001.

Ben--Last year was pretty good. Our stock went up 20X. We made some progress. This year we've got lots of cash, customers, a bit of a name, a great software product. It's the most relaxed I've felt going into a year for about four years. That's good news for investors! Good news if they bought the stock at 39 cents! Other people have made a ton of money and done very well.

Natalie-- How's the climate in the boardroom these days, and is the boardroom still named after Notorious BIG? What's the working relationship between Marc (Chairman) and Ben (CEO)? Who has the final word in the company, and how do the two of you lead the software dream team that investors should buy into?

Marc--The important thing is that we've known each other really well since 1995. So, we have just a really good personality fit. We get along really well. In my experience, that's rare for people to get along that well in a really stressful situation. We don't think the same things, but we think in similar ways. Our minds are wired the same way in terms of how we arrive at conclusions. We decided to have a partnership where we would do the things we're better at. Ben's better at running the business and managing employees. I'm better at fundraising, marketing, sales, customer relationships, technology, product planning. We split up the responsibilities to have a lot more brute force. There's twice the bandwidth that you usually have if there was only one of us. It's really different to set up this kind of structure, but somebody has to be in charge. The other person has to bow to their judgment when the hard calls get made. For us, that's Ben. A lot of strong people are not really willing to do that. I'm willing to do that with Ben.

NatalieÑThat says a lot about trust.

Marc--Trust and communication, which we think are closely related. When we have something we disagree on, I'll present my case and all the data to support it. He'll present his case. One of us always comes around to the other's point of view. Part of it is that we're both engineers. We both have computer science degrees. That's how we think. If his data contradicts my assumptions, I'm going to listen to that. It's hard to do that with people who think emotionally. A lot of people think in terms of people, emotions, and feelings. That's more complicated. Engineering mentality makes it, in theory, a little easier. The only thing either one of us care about is the company succeeding. I don't need to be the CEO. He doesn't need to push me out. A lot of times, the CEO tries to box out the founder. We don't have the insecurity like that.

Ben--We're extremely good friends. We've been working together for nine years. Friends like Marc I can count on a peace sign. One to two.

NatalieÑYour boardrooms are named after rap artists and your software is named after Lao-Tzu's philosophy. Sounds like a recipe for anarchy. Do you keep the Zen, tea drinkers on one side of the company and the pot-smoking potty mouths on the other?

Ben--We sold the Notorious BIG boardroom to EDS. We've got the Run DMC conference room. We've got Tupac, Ice Cube, Snoop Dog.

NatalieÑCan a white-collar technology geek like you really be into rap?

Ben--When we started the company, a lot of the employees were rap fans. I'm a rap fan.

Marc--Ben knows hip-hop encyclopedically. He is comprehensive on the topic. Ben has a Lincoln Navigator with the biggest sub-woofers I've ever seen in my life. Other people quote Greek philosophers. He'll quote rappers for his management lessons.

Ben--It takes the edge off things. We're in a serious business with serious issues. It's nice not to have the conference rooms be a reminder of that. There were a lot of killings in rap. We stay away from that. We just have the conference rooms.

Marc-- As for "the Way" and those names, that was Tim Howe's engineering staff. They got off on that track early on. They are good names, quite descriptive, but they're not official names. The engineers get in front of customers, and the customers say, "What is this? A cult?" Then the official names don't take because they're not as interesting.

Ben--We've got the Way, the Truth, the Word. The Way is the interface into the Truth. The Truth has all of the knowledge about what should be the Word. The Word contains what is. Our engineering team gets religious about their products. The Spin is another axis into the Truth.

NatalieÑBack to the real world of numbers. You say you're cash positive, but the quarterly report shows a net loss of -$2 million, reduced from -$3.1M last quarter. Net revenue was $5 million, up from $4.3 million last quarter. Cash resources of $56 million.

Ben--The P and L net loss is representative of the way we do accounting, rather than the way we actually do business. Cash flow from operations was positive. That was true last quarter as well. Because we're a new software company, we are required to recognize revenue over the term of the maintenance agreement. Normally you sign the deal and get the money up front.

NatalieÑPositively, absolutely cash breakeven right now?

Ben--That's right! We're throwing off cash! We used to lose a lot of money. Not any more.

NatalieÑDo you have to keep Marc separated from the employees? He's been described as mercurial.

Ben--Marc is a brilliant guy. You'd be hard pressed to find a better strategist than Marc. He invented the web browser! AOL would listen to every speech he made and copy it. He's one of the best in the world. He's also a very famous guy. He's effective in getting us meetings and sales calls. He's not a manager, but that's okay. I can do that.

NatalieÑYou've been described as the kind of guy employees would walk through fire for. Is "not a manager" a euphemism for enfant terrible (a characterization of Marc made by another writer).

BenÑ[Marc] gets real excited but that's good. It's good to have people who get excited around. He keeps the intensity high. Marc doesn't have a high tolerance for sloppy thinking.

NatalieÑLast words?

Ben--We're really pleased with business. Happy to come off of a good quarter. Happy to have made our 1^st acquisition, which we think will turn out really well. We are certainly happy to be making money.

Natalie--We're happy to set our calendars to year-end 2007, to see if our predictions about the future of Opsware, Marc Andreessen and Ben Horowitz, come true!

Full Disclosure: Natalie Pace owns shares of Opsware.

Leaders of the Pack: iSophia's featured companies outperformed the markets again last year.

Five companies more than doubled and one brought 21X returns. Catch up on our top 14 picks, and the secrets to our success.

iSophia's formula for success? Pick the leader in the sector. Make sure the company is run by ethical visionaries who create great products and have an ear open to their customers. Never pay retail! Growth AND value matter. We feature the companies that catch our eye, but recommend that you buy the companies that catch yours. Why? Because the formula for strong gains is "buy low, sell high." If you pick a company that you don't know anything about or understand, how are you going to evaluate whether the company is peaking or falling behind? Also, if you care about a product or a company, chances are that your eyes and ears will perk up when there's a news flash. Bottom line? Invest with your heart, but add your brain. If you don't understand a company or its product, do what Warren Buffett would do. Turn your attention to something that you do understand. Warren is one of the richest guys on the planet, and, even though Bill Gates is reportedly a friend, Warren is notorious for avoiding NASDAQ altogether.

So, how well did our writers pick the leaders of the market and, more importantly, should you buy into any of these companies now, or did you miss the run? We'll do our best, as always, to give you the latest news and trends, and then, dear friend, you be the judge. Below is a rundown of the featured companies and their gains. Click here to go to a complete report card, with additional information to inform your buy and sell decisions.

Companies featured December 2002 through June 2003.

These are companies that have had, for the most part, a very healthy run over the last six months. If you bought when we featured them, you might consider profit taking (but not before evaluating their future potential and whether or not the markets are going to continue their run). As you can see most of these companies are sporting substantial gains! If you want to finish out the Bull Run before profit taking, we highly recommend that you read the "Santa Rally" article, written by Paul Woods, in e-zine 43. Historically, January tends to be a very strong month. Click here to go directly to Paul Wood's article:

Companies featured July 2003 through December 2003.

The above-listed stocks are companies that have not had time to rally. If you bought when we featured them, you might consider waiting for their gains to kick in. If you haven't yet bought into your favorite of these companies, you might consider reading iSophia's feature articles on the companies (go to our archived e-zines) and doing a little investigative work on your own, including sampling the product yourself! Many of these companies are trading near or below the share price when we featured them, which, in our estimation, means the share price is reasonable. We're not the only ones with that opinion. Of the seven companies listed above, three are considered to be undervalued when compared to growth, by Money Central, namely Jet Blue, AU Optronics and Sony. These are all companies that are leading a new market, on the verge of a very promising new product or poised to take the lead (in our eyes) in their blue-chip sector. FYI: Jet Blue is trading 29.4% lower than it was when we featured the airline (and considered them to have tremendous growth potential), This month Jet Blue, with its new lean share price, saw a large increase in institutional investment and a BUY rating from Merrill Lynch.

Bottom line: Last year it paid off big-time to read iSophia's e-zines. If you'd like to become a member and ensure that you receive all of the latest feature articles, click here. $4.50 a month, the price of a grande latte, gives you a whole lot of BUZZ for your BUCK!

Full disclosure: Natalie Pace, the writer of this article and chief strategist for the iSophia bimonthly picks, owns shares and/or positions in the following companies: Opsware, Bennett Environmental, Net Gear, Jet Blue and Sony.

Disclaimer: iSophia is not a broker, and does not operate or act as such.

Bull Run 2004?

Predictions from the ProsÉ with a Rebuttal from the Bears.

The Bulls Make Their Case All Over the Internet:

1. "With low interest rates and low inflation and growth on pace to be about 4% in the fourth quarter, I think the market has more room to run." Meri Anne Beck-Woods, CFO, bond expert, Odyssey Advisors
2. "Stocks are still reasonably valued relative to interest rates and earnings estimates are still being revised upward for next year. If I had to bet, I'd say stocks will have a decent year in 2004." Paul Woods, CEO, equity expert, Odyssey Advisors
3. "On March 29, 1999, there were twice as many stocks hitting new 12-month lows as new highs on the New York Stock Exchange. Today, the extreme opposite is true. This past week has averaged more than 50 times more stocks hitting new highs as new lows on a daily basis. Now that is strong bull-market leadership." James B. Stack, InvesTech Research
4. "China's imports overall have risen dramatically over this year, from approximately $25 billion per month a year ago to $33 billion per month more recently, as China has become a major consumer of the world's commodities. Doubtless, part of the recent firmness in non-high-tech commodity prices is attributable to China's voracious appetite for raw materials." Alan Greenspan, Chairman of the Federal Reserve Board. Statement to the Committee on Ways and means, U.S. House of Representatives, 10.30.2003. (Doubtless the recent surge in NASDAQ is at least partially attributable to China's voracious appetite for technology. During the NASDAQ slump and the capital spending cut-off, companies, like Intel, kept their revenues alive, by shipping cutting edge technology directly overseas to Asia.)
5. "The majority of companies have cleaned up their balance sheets, lowered their debt and cut costs dramatically so they are in better shape for stronger earnings and easier earnings comparisons." Meri Anne Beck-Woods, Odyssey Advisors
6. "From October 2002 through November of this year, Technology has been the best-performing sector and has led the market recovery by climbing 75.4% compared with a gain of 32.6% by the S&P 500É The recovery to date has been relatively broad-based across all tech industries and across both low and high-quality issuesÉ We believe technology investors will become more selective next year, especially if economic growth, capital spending and employment fall short of expectations." Keith L. Miller, Chee K. Ooi, Daniel E. Cox, Smith Barney, Portfolio Strategist, 12.18.2003
7. "Since there has not yet been a major surge through chief equity strategist Tobias Levkovich's year-end S&P 500 target of 1,075, he believes the market's upward trend can be sustained into the first quarter of 2004, and the overshoot of his target that he has been expecting may still take placeÉ Industrial cyclicals are still seen as the leaders of this positive momentum, along with good small-cap performers." Mark Fulton, Deputy Director of U.S. Equity Research, Smith Barney, Portfolio Strategist
8. "Chief global strategist Matthew Merritt still sees equities as an outperforming asset class next year, driven by global earnings growth in the 10-15% rangeÉSmall-cap outperformance has been a global phenomenon, and we remain positive on this trend. Our theme of international diversification remains intact, particularly given a shaky medium-term outlook for the U.S. dollar." Mark Fulton, Deputy Director of U.S. Equity Research, Smith Barney, Portfolio Strategist
9. "A sound economy means that REITs should find it easier to maintain and raise their dividends (which in general don't qualify for favorable tax treatment). But after four successive years of positive returns (with double-digit gains in three of those years), yields on property-owning REITs have dropped to 6%, on average. At that level, many investors often start to bail out of REITs." Jeffrey R. Kosnett, Kiplinger
10. Analysts see profits jumping an average of 12% in 2004, according to Thomson First Call.
11. "Even with the 2003 price advance, stocks are not expensive. The S&P 500 sells for 18 times the 2004 consensus of analysts' profit estimates. For much of the 1990s, by contrast, the market's price-earnings ratio fluttered in the 20s, despite higher interest rates and inflation." Jeffrey R. Kosnett, Kiplinger
12. "As long as interest rates are low and inflation is not a problem, the economy won't go awryÉ " Gordon Halcomb, financial adviser, Mechanicsville, VA

BEAR REBUTTAL:

Though you can throw a dart at any financial web-site and find a bull analyst touting the robust recovery, under-reported earnings growth and positive outlook for at least the first quarter 2004, the BEAR argument has some pointedly sharp facts upon which to rest their belief in a major pullback next year.*

1. Corporations and individuals are drowning in debt.
2. No more Free Money. Bush has given out all the rebates he can give, Alan Greenspan has kept interest rates as low as they can go and defense spending has likely reached its Congressional cap. (Of course, President Bush's six point economic stimulus plan might provide additional relief, if at first only psychological, to small business owners who are largely responsible for creating new jobs in America these days. Bush is promoting: Making health care costs more affordable and predictable; Reducing the burden of lawsuits on our economy; Ensuring an affordable, reliable energy supply; Streamlining regulations and paperwork requirements; Opening new markets for American products; and Enabling families and businesses to plan for the future with confidence by making tax reductions permanent.)
3. No more borrowed money. Commercial banks are cutting back on lending money and companies are cutting back on borrowing, leaving less money floating around for speculative investments
4. The heroic U.S. consumer, who performed swimmingly over the last three years, is drowning in personal debt.
5. Weak top line growth at U.S. companies. Most of the revenue growth is as a result of cost-cutting policies, rather than real top-line sales growth.
6. Salaries have been declining for three years. Wal-Mart said it's seeing an unusual surge of sales on the 15th of the month as their customers appear to be living from check to check, according to Jon Markman, MoneyCentral regular contributor.

iSophia researchers are working on an article comparing macro trends for election years. If you're wondering what history says about a 2004 rally, be sure to stay tuned into future iSophia e-zines. And remember, despite all of the predictions in the world, one national natural disaster, like 9.11.2001, will drag the markets down overnight. Profits are a good thing. If you're in a position to walk away from the table with huge returns, perhaps because you bought in last October when nobody went near the markets, make sure there is ample reason to keep your gains on the table. Don't neglect to cash in your chips. It's the most common mistake made by investors.

*For more information on "Why Bears See a 5,000 DOW," written by Jon Markman, go to:

http://moneycentral.msn.com/content/P66463.asp?special=dow10K

Girl's Guide to Profit Taking?

Don't let fear of taxes be the death of your capital gains! By Meri Anne Beck-Woods and Natalie Pace

Want to start the New Year off with a bang by taking some of the profits run up in 2003 by NASDAQ (+50.04% on the NASDAQ Composite Index) and NYSE (+27.74% on both the Dow Jones Industrial Average and the S&P 500 Index)? Are you letting fear of taxes rule your decision-making?  Many of us are concerned with the tax ramifications of profit taking.  It's imperative to always check with your accountant BEFORE selling your assets to get a heads-up on the tax consequences. However, excessive FEAR OF TAXATION can cost you big-time capital gains, especially if you don't act when the profits have reached their high!

With the NASDAQ up nearly 70% and the S&P 500 up nearly 40% from their 2002 lows, many investors are in a position of taking some seriously delicious stock gains that have not been seen since the roaring 90's that had everyone believing they should quit their job to become day-traders, where millions were there for the taking. On December 29, 2003, 1061 stocks hit new 52-week highs, while only 95 stocks hit new lows. All in all, 2003 was a great year for the stock market and a welcome change from the previous three years.

President Bush has made it more attractive to buy and sell stocks for US taxpayers, providing you don't buy and sell in the same 12-month period.

The Jobs and Growth Tax Relief Reconciliation Act of 2003 that passed Congress by a whisker on May 23rd of 2003 is good news for both long and short-term stock market gains. First, for short-term gains, which are taxed at your ordinary income rate, the individual rate cuts in the 2001 Bush Tax Cut are accelerated and now become effective on Jan 1, 2003. Previously, the tax cuts were not supposed to become effective until 2004 and 2006. The 38.6% maximum rate goes to 35%. The 35% rate is lowered to 33% while the 30% rate becomes 28% and the 27% rate goes to 25%. The existing 10% and 15% rates are unchanged. For more on "What the Bush Tax Cut Means for You" go to www.SmartMoney.com and check out the article with that title. They also have tax calculators that can show you how much money you will save under the new tax rules, a list of the various rules and information on how the rules will apply to Marriage Penalty relief, the Alternative-Minimum Tax, and other aspects of the legislation.

Long-term capital gains received the most relief under the 2003 Act! Now, long-term capital gains from sales on or after May 6, 2003, will be taxed at a 15% rate instead of 20% in the highest tax bracket, and only 5% for those in the 10% or 15% bracket, up until 2008, when that rate goes to 0% for one year. Then, unless Congress does something else, we go back to the old pre-2003 rates that are higher.

Note: REITs are not typically subject to favorable tax treatment. If you have a world class coin collection and decide to reap a long term gain you will pay a 28% maximum rate, 25% on real estate, and ordinary tax rates on distributions from SEP, Keogh, and 401K accounts. Canadian iSophia members: Please check with the Canadian Revenue Authorities for the current capital gains tax laws of Canada. Bottom line: Always check with your accountant.

US CAPITAL GAINS OVERVIEW:

1. If you buy and sell stock in the same year, the profits you make are subject to your personal income tax rate.
2. If you buy and sell stock after holding the investment for over 12 months, the capital gains tax is 15%.

The IMPORTANT THINGS TO REMEMBER ARE THAT GAINS ARE GOOD, and SELLING HIGH is ALMOST ALWAYS more PROFITABLE (except in the short term gains situation), EVEN CONSIDERING CAPITAL GAINS TAXES, than waiting for the stock to fall before you sell. This seems like a no-brainer, but many investors use the excuse that they don't want to pay taxes as a reason not to sell a stock that has hit its high. Here's a news flash! You'll still have to pay taxes when the share price falls. More importantly, stock prices can have a wide range during a 52-week period. It makes sense to pocket some of that gain before it evaporates, even if it means paying taxes at either ordinary income tax rates or the 15% long-term capital gains tax rate.

The Climb Uphill is Rough, but the Fall is Steep

Here's another important consideration for would-be profit-takers. Did you know that stocks fall twice as fast (or faster) as they climb, even under the most benign of market volatility conditions? Cash in hand profit-taking is what separates the novices from the professionals, who understand that WHEN you buy and sell is just as important as WHAT you buy and sell.

Let's apply the capital gains tax to Brightpoint (NASDAQ: CELL) in a real-world scenario, to show you how you can SELL HIGH, PAY TAXES and still WIN BIG by profit taking.

In December 2003, Brightpoint closed substantially lower than the gains investors were looking at just two months prior, in October. The Brightpoint share price popped after the 3Q 2003 Brightpoint earnings report showed a 58% increase in revenue and a 178% increase in operating income over 3Q 2002.  On Halloween, CELL shares were trading at $30 each, for a value of $30,000, if you owned 1000 shares. By 12.26.2003, the value of 1,000 shares of CELL stock had fallen off by almost half (42.3%) to $17,310.00. If the investor SOLD high in October AND PAID taxes, s/he would have pocketed at least 27% more than the December 2003 value of her CELL stock, based upon the 15% capital gains tax rate. See below for the numbers.

1. Brightpoint hit 52-week high of $30 for $30,000 value on 1000 shares.
2. If you bought CELL in June of 2002, when the company did a 7:1 reverse split to avoid delisting from NASDAQ, your buy-in for 1000 current shares was $1,000. (The stock has had two 3:2 splits since June 2002.)
3. 15% capital gains tax on $29,000 profit is $4,350.  ($29,000 is your profit after subtracting your initial investment of $1,000. You also need to subtract your trading fees.)
4. Your profit after 15% capital gains tax is $24,650.
5. Waiting to sell cost you $7,340 (based upon the 12.26.2003 price of $17.31 share).

No one has a crystal ball, but there are a few reliable tips that are touted by professional money managers. Rance Masheck says, "Don't buy into a stock that has hit it's first high in a long period of time. Holders are going to jump ship!" This advice should be remembered when profit-taking also. Brightpoint had two dismal years when NASDAQ and the economy fell out in 2000. During that time, the company was the subject of an SEC investigation, restated earnings, was sued by shareholders and barely beat a NASDAQ delisting with a 7:1 reverse split. Not surprisingly, when things turned around for Brightpoint in 2003 and the stock price soared by 29X, the insiders, who had been beaten down for years, began jumping ship!

There is a laundry list of insiders who sold CELL in the last quarter of this year.  Robert Laikin, CELL's Chairman and CEO, sold $9 million worth of CELL in December, reducing his shares to just 100,000, per MoneyCentral.msn.com. Brightpoint's President James Mark Howell dumped $8 million, with just 25,769 shares left in his account.

It's difficult to foresee the individual (and rapid) pullbacks that occur on stocks, like Brightpoint, which previously were the standout leaders of a robust market year. If your goal is to increase your net worth, however, remember that GAINS ARE ALWAYS GOOD! You don't have to buy at the bottom and sell at the pinnacle to achieve admirable gains. 29X returns look good on any balance sheet, even an accountant's! Don't let fear of taxes be the death of your profits! And let's hope we have a continued problem of when to take gains in 2004. Happy New Year! Rock on!

Q & A with Money Managers:

Q&A with money managers: Paul Woods, Tom Weary and Meri Anne Beck-Woods.

You can reach these advisors directly by calling or emailing.

Paul Woods, CEO
Odyssey Advisors.
310.568.4700.
pwoods@odysseyadvisors.com

Tom Weary, CEO
Diamond Portfolio Advisors.
tom@diamondportfolio.net

Meri Anne Beck-Woods, CFO
Odyssey Advisors.
310.568.4700.
mabwoods@odysseyadvisors.com

Select questions from the iSophia Members Only Chat on December 17, 2003.

Question: What sectors in general will be strong going into next year?

Paul: With a strong economy, economically sensitive companies with earnings tied to the business cycle, like retailers, technology, industrial materials, transportation, etc. should continue to do better than others. Sectors tied to capital spending.

Question: Bristol-Myer Squibb? What do you think about Erbitux being on the fast track with the US FDA and Canada's equivalent? With ImClone's executive suite missing all three founding executives, do you think that BMY is preparing to eat up ImClone? Is BMY's stock poised to pop?

Paul: I think they're still waiting to see if the FDA approves the drug.

Tom: They can't seem to get out of their own way at BMY. I'd avoid it.

Paul: I agree with Tom. BMY's accounting is notoriously creative.

Comment: BMY has certainly gotten their fair share of SEC attention over the last three years. I'm not sure I like it in the long-term, but we've seen, in companies like Genentech (NYSE: DNA), how an FDA approval can cause the share price to double or triple in a few weeks.

Paul: The only good thing about BMY is a high dividend yield.

Question: What about interest rates? A number of pros think the Feds will wait until post-election to raise rates. What is your consensus?

Paul: The problem is that short-term interest rates are too low, even lower than inflation. It's putting pressure on the dollar and the Fed may have to do something about it before the election.

Meri Anne: I think interest rates will start to creep up before the election, but as long as inflation remains tame, it won't be a big move.

Question: Will low yields in the bond markets continue to drive investors over to stocks?

Meri Anne: Bond yields and expected returns are lower than stock market returns, even if they are conservative.

Beauty's Next Big Thing: Non-Surgical Face Lifts.

Save yourself tens of thousands of dollars and a whole lot of pain and bruising.

Lori Hart Owner, Lori Hart Facial Spa in Marina del Rey, California www.LoriHart.com

In Oscar Wilde's The Picture of Dorian Gray, only creeps become ugly as they age. Unfortunately, in the real world, gravity, the sun, smoking, makeup, sun block, no sun block, having kids and just about everything else you do adds up to the same wrinkling and jowling as being a creep. Thank heaven for Lori Hart, who has found a way to stimulate your face and neck into thinking young again, with the subtle tingle of micro electrical currents. Her non-surgical face-lifts and mineral-based makeup can safely and effectively take years off of your face, without the exorbitant expense, pain, bruising and potential for a botched-up job (like so many celebrities we've seenÑMichael Jackson!).

From the moment you step into Lori's Marina del Rey salon, you rue the caffeine frenzy you threw your body in to greet the day. In a vintage Hollywood salon that is worthy of Marlene Dietrich, , complete with movie posters and Sinatra kicking up the swing, Hart's staff begins by pampering you with herbal tea. Lori herself, at 50, looks like a woman who could only have been created under the most skillful surgeon's knife, and is, beyond doubt, her own best evidence of the efficacy of the non-surgical face lift and the facial products that she sells.

No matter where you live in the United States or in Canada, you owe it to yourself to call Lori FIRST before considering a face-lift. Even if you are merely thinking Botox and collagen to ease wrinkles and those nasty deep lines between the nose and the mouth, CALL LORI FIRST. Your face is far too beautiful a thing to waste beneath the massive threat of the elements and time, and you can train the cells, with the help of electrical impulse, to THINK YOUNGER, lifting, instead of filling, to eliminate wrinkles and jowling.

You'll love Lori's pampering, the "Hollywood" royal treatment and you could come away looking ten years younger without plunking down ten grand plus! For more information on non-surgical face-lifts and natural "mineral-based" makeup, contact Lori Hart at www.lorihart.com or 310.574.3990.

iSophia's Non-Profit COMPANY OF THE YEAR:

Co-Abode.com is a national, non-profit organization where single mothers can meet to share living space, resources, finances and child-rearing duties. It's a mom-matching, house-sharing service giving women and their children the opportunity to share a home and family life together, often during tough transitions.

Carmel Boss with her son, Cooper Founder, Co-Abode.com Photo Credit: Merle Stern

Carmel Boss originally launched Co-Abode as a for-profit enterprise, but after learning that so many of her "customers" were going through severe financial hardships, she pulled her company through a very difficult transition to non-profit status. In 2003, Carmel was honored by Parenting Magazine for positively impacting the lives of thousands of single mothers across the United States. Co-Abode.com is being honored by iSophia as the Non-Profit Company of the Year not only because it is a brilliant solution to a growing need, but also because Carmel Boss maneuvered the company through the tough times of a failing for-profit business model, and secured the non-profit funding that allowed this much-needed business to continue and, hopefully, thrive. As a side note, iSophia's founder , Natalie Pace, attributes the successful launch of her company to the springboard that Co-Abode's service gave her.

"Co-Abode was the launch pad for my current success," says Natalie. Being a single mom, she felt that her fairy-tale had shattered, her expenses doubled, and she was being pulled in 100,000 different directions. Rooming with another mom lifted the burden from her shoulders. "Having daily devastation removed from your world allows you to dream." If you know of a single mother going through a difficult time or transition, tell them to check out Co-Abode at www.Co-Abode.com! See below for an interview with Co-Abode's founder, Carmel Boss.

N.W. Pace--Isn't it a great life! You've been able to continue helping thousands of single mothers for three years now! What an accomplishment. It's been quite a challenge to support the operating costs for this venture, hasn't it?

Carmel--I was thinking about that the other day. Most of the people