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lateral would all be more accessible and more effective if presented as streaming video with synchronized rich media The costs of printing and distributing hard copy would be mitigated The sales force could be trained directly by engineers in the lab, without the need to travel For certain categories of product, sales people often encounter questions that they must refer back to engineering when trying to make a sale The ability to ask the question while still at the customer site and have an authoritative answer instantly could be a positive factor in making the sale The sales staff may even send back video footage of the environment in which a piece of equipment will need to be installed to prepare the installation engineers and get an assessment of whether or not the environment needs modification, prior to making the sale.

EXHIBIT 8-19

For product launches, streaming media also provides many attractive advantages Consumers can watch as the product is unveiled and footage of the product launch itself repurposed in other marketing communications packages thereafter The best product demonstrator or salesman that a company has can do his or her pitch on streaming media and this can be indefinitely accessed directly by consumers, or else as part of a sales presentation Companies are under closer consumer scrutiny today If a company has factories in Thailand, for example, it may be subject to accusations of using child labor or of otherwise mistreating employees With streaming media, such companies could stream pictures from their factories live, for the entire world to see This would provide proof of their ethics and standards and reduce consumer skepticism.

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Cooperative relationships have a higher level of information sharing. Supply chain Cooperative partners may provide automatic commit- relationships have a ments and confirmations or share information on forecasts, inventory availability, higher level of purchase orders, or order and delivery sta- information sharing. tus. Usually, one partner posts information that the other partner reviews and acts on a one-way communication in which data are sent either manually or electronically ( pushed ) from one partner to the other or published in a manner that s accessible by the recipient ( pulled ). In a cooperative collaboration, the type and format of data provided usually are standardized. While more sophisticated technologies are available, electronic data interchange (EDI) is the primary method of communication used today, through either a proprietary EDI network or the Internet. For companies without an EDI capability, Internet-based supplier portals or extranets are an excellent alternative. Most of these tools enable document and content management and include embedded workflows to automate the routing of documents, forms, and certain data and tasks.

To take this a level further, what would be more reassuring than seeing a video of your built-to-order car or PC at every stage of its manufacture Streaming media can make applications like that possible, because it is digital and because it drastically changes the economics of making and delivering such a video The video technology for corporate communications has existed for a long time, yet isn t used as much as it could be, for three reasons First, distribution of video was costly and cumbersome in the past With streaming media technology, those costs fall dramatically Compared to renting satellite time or duplicating VHS tapes, as was once the norm, the cost of deploying a video stream is much lower The second reason has to do with the costs of producing video material in the first place.

Excess Return Period We consider Berkshire a well-managed, great financial/diversified firm, and we used a 10-year excess return period in our valuations NOPM Estimate In order of importance, Berkshire s expenses are: insurance losses and loss adjustment expenses, cost of products and services sold, insurance underwriting expenses, and SG&A To calculate operating income for Berkshire, we subtracted total expenses from total revenue To arrive at Berkshire s NOPM, we divided operating income by revenue Over the past three fiscal years, NOPMs were 102 percent in 1999, 164 percent in 2000, and 39 percent in 2001, for an average of 102 percent It the nine months ending September 30th, Berkshire Hathaway s NOPM jumped to 1441 percent We used the 102-percent three-year average NOPM in the base-line valuation, and adjusted the NOPM upward in a subsequent valuation Income Tax Rates.

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