Dutton Associates Announces Investment Opinion: EasyLink Speculative Buy Rating Maintained in Update by Dutton Associates

  
    
  
  
    
      Dutton Associates updates its coverage of EasyLink Services 
      (Nasdaq:EASY) maintaining a Speculative Buy rating and a 12-month price 
      target of $5.20. The 9-page report by Dutton senior analyst Joe Noel is 
      available at www.jmdutton.com, and 
      from First Call, Bloomberg, Zacks, Reuters, Knobias, and other leading 
      financial portals.
    
    
      EasyLink provides its clients with an assortment of outsourced 
      electronic tools that allows them to transform manual and paper-based 
      business functions into automated electronic transactions. EasyLink’s 
      networks facilitate transactions that enable the movement of money, 
      materials, products, and people, such as insurance claims, trade and 
      travel confirmations, purchase orders, invoices, shipping notices and 
      funds transfers, among many others. EasyLink manages tens of millions of 
      electronic messages and transactions per month for more than 20,000 
      companies, including over 400 of the Global 500. The September 2006 
      quarter was disappointing for EasyLink investors in terms of revenue 
      generation, operating expenses and EPS. The increase in gross margins to 
      just over 61%, exclusive of one-time items, which yield a reported gross 
      margin of over 63%, is exciting in our opinion. Management’s 
      guidance for the December quarter of 2006 is for revenues of $17.6 to 
      $18.1 million. We believe this company has significantly under-utilized 
      assets in its fax services that can be put to better use either through 
      new product introductions, sales of certain assets or possibility of the 
      sale of the entire company. We strongly believe EasyLink as an 
      acquisition target is worth well more than the current market 
      capitalization of approximately $30 million, and we specifically point 
      to J2 Global Communications which trades at approximately 7X projected 
      2006 revenues while EasyLink trades at approximately .4X projected 2006 
      revenues.
    
    
      About Dutton Associates
    
    
      Dutton Associates is one of the largest independent investment research 
      firms in the U.S. Its 29 analysts, primarily CFAs, have expertise in 
      many industries. Dutton Associates provides continuing analyst coverage 
      of over 140 enrolled companies, and its institutional-quality research, 
      estimates, and ratings are carried in all the major databases serving 
      institutions and online investors.
    
    
      The cost of enrollment in our one-year continuing research program is US 
      $39,500 prepaid for 4 Research Reports, typically published quarterly, 
      and requisite Research Notes. Dutton Associates received $83,500 from 
      the Company for 13 Research Reports with coverage commencing on 
      9/04/2002. We do not accept payment of our fees in company stock. Our 
      principals and analysts are prohibited from owning or trading in 
      securities of covered companies. The views expressed in this research 
      report accurately reflect the analyst's personal views about the subject 
      securities or issuer. Neither the analyst's compensation nor the 
      compensation received by us is in any way related to the specific 
      ratings or views contained in this research report or note. Please read 
      full disclosures and analyst background at www.jmdutton.com 
      before investing.
    
  
Dutton Associates updates its coverage of EasyLink Services
(Nasdaq:EASY) maintaining a Speculative Buy rating and a 12-month
price target of $5.20. The 9-page report by Dutton senior analyst Joe
Noel is available at www.jmdutton.com, and from First Call, Bloomberg,
Zacks, Reuters, Knobias, and other leading financial portals.

   EasyLink provides its clients with an assortment of outsourced
electronic tools that allows them to transform manual and paper-based
business functions into automated electronic transactions. EasyLink's
networks facilitate transactions that enable the movement of money,
materials, products, and people, such as insurance claims, trade and
travel confirmations, purchase orders, invoices, shipping notices and
funds transfers, among many others. EasyLink manages tens of millions
of electronic messages and transactions per month for more than 20,000
companies, including over 400 of the Global 500. The September 2006
quarter was disappointing for EasyLink investors in terms of revenue
generation, operating expenses and EPS. The increase in gross margins
to just over 61%, exclusive of one-time items, which yield a reported
gross margin of over 63%, is exciting in our opinion. Management's
guidance for the December quarter of 2006 is for revenues of $17.6 to
$18.1 million. We believe this company has significantly
under-utilized assets in its fax services that can be put to better
use either through new product introductions, sales of certain assets
or possibility of the sale of the entire company. We strongly believe
EasyLink as an acquisition target is worth well more than the current
market capitalization of approximately $30 million, and we
specifically point to J2 Global Communications which trades at
approximately 7X projected 2006 revenues while EasyLink trades at
approximately .4X projected 2006 revenues.

   About Dutton Associates

   Dutton Associates is one of the largest independent investment
research firms in the U.S. Its 29 analysts, primarily CFAs, have
expertise in many industries. Dutton Associates provides continuing
analyst coverage of over 140 enrolled companies, and its
institutional-quality research, estimates, and ratings are carried in
all the major databases serving institutions and online investors.

   The cost of enrollment in our one-year continuing research program
is US $39,500 prepaid for 4 Research Reports, typically published
quarterly, and requisite Research Notes. Dutton Associates received
$83,500 from the Company for 13 Research Reports with coverage
commencing on 9/04/2002. We do not accept payment of our fees in
company stock. Our principals and analysts are prohibited from owning
or trading in securities of covered companies. The views expressed in
this research report accurately reflect the analyst's personal views
about the subject securities or issuer. Neither the analyst's
compensation nor the compensation received by us is in any way related
to the specific ratings or views contained in this research report or
note. Please read full disclosures and analyst background at
www.jmdutton.com before investing.