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New Valuation Metrics: Mecklermedia Creates Two More Investor Gauges

While Wall Street uses its sun dial to try and keep track of Internet years we pull out two more investment metrics that empower investors to get various angles on Internet companies from a user and page view perspective.

Say hello to the Internet User Value Index (ValUDex) and Page View Index (PageDex).

These two new indices join the industry-leading Internet Stock Index (ISDEX) as a three-part valuation method from yours truly to get inside the numbers, bring to life the differences between companies and perceived worth, and generally try to walk the shining path to a more enlightened, or at least, semi-brightened numbers game.

Go ye forth and multiply, or at least make heavy use of the DEX suffix:

THE WEB INDEXES (WEBDEX)

ValUDex      
Internet User Value Index      
       
Web Property January Market cap Value
Web Brand Users or PMV * Per
  (millions) (millions) User
Yahoo 27.9 $ 2,737 $ 98.19
Netscape.com* 21.4 $ 600 $ 27.99
Microsoft.com* 15.7 $ 1,500 $ 95.70
Excite 15.2 $ 701 $ 46.21
Infoseek 11.7 $ 379 $ 32.40
AOL.com* 11.2 $ 1,000 $ 88.94
GeoCities 10.5 $ 300 $ 28.58
MSN 7.2 $ 600 $ 83.71
Lycos 6.8 $ 599 $ 88.18
AltaVista* 6.8 $ 325 $ 48.05
TOTAL 134.3 $ 8,740 $ 65.08
AVERAGE 13.4 $ 874 $ 65.08
       
* our est. private market value for the .com Web site only      
User data: RelevantKnowledge      
ValUDex is a creation of Mecklermedia      
Market cap as of 02.18.98      
       
PageDex      
Page View Value Index      
       
Web Property Average Daily Market cap Value
Web Brand Page Views or PMV * Per Avg. Daily
  (millions) (millions) Page View
Yahoo 65 $ 2,737 $ 42.11
AOL.com* 35 $ 1,000 $ 28.57
GeoCities 35 $ 300 $ 8.57
Netscape 33 $ 600 $ 18.18
Excite 30 $ 701 $ 23.35
Microsoft.com* 30 $ 1,500 $ 50.00
MSN 29 $ 600 $ 20.69
Infoseek 22 $ 379 $ 17.23
Lycos 19 $ 599 $ 31.50
AltaVista 18 $ 325 $ 18.06
TOTAL 316 $ 8,740 $ 258.25
AVERAGE 32 $ 874 $ 25.83
       
* our est. private market value for the .com Web site only      
Page view data: Mecklermedia estimates based on MediaMetrix      
PageDex is a creation of Mecklermedia      
Market cap as of 02.18.98      

In Mecklermedia's Internet User Value Index (ValUDex) for private firms, we estimate value based on comparables and experience. For public companies such as Microsoft (NASDAQ:MSFT), which owns several Web brands or sites, we estimate the .com part on its own, and leave the company's other divisions not valued.

Does that mean that Excite (NASDAQ:XCIT) at $46.21 per user is a bargain compared to Yahoo! (NASDAQ:YHOO) at $98.19 per user? You decide. A number of factors influence, including first to market status, overall audience size, brand awareness, and working capital (Yahoo! has more than $100 million vs. Excite's $27 million). Ultimately, it's a going forward or expectation basis that determines much of perceived value.

In Mecklermedia's Page View Index (PageDex) it shows GeoCities (which just went through another round of financing and we estimate could be worth about $300 million) at $8.57 per page view, a substantial discount to any of the others based on that metric alone. With these two new metrics you'll be there if GeoCities paves the way to tomorrow's online service.

With ValUDex and PageDex, you'll be inside the numbers in a space where value is not only in the eye of the beholder but in constant flux.