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Page By Page: WEBDEX Shows Top Site Valuation Per User

A month ago, values per user hovered north of $100, now the average sits at about $64. That's because there's an inherent conflict in using words such as "user" to describe a visitor to a Web site.

No more than someone looking at a menu at Dennys is not a restaurant "user," but merely someone gazing at a page.

Users can be nomads, passersby, taking up seat space without forking over value in return.

AOL, the closed online service with a market capitalization north of $12 billion, boasts a value per "subscriber" of more than $940 (counting AOL's 11 million and CompuServe's 2 million). Why so valuable? Because most of them pay $21.95 per month to be there. Real cash flow. The question then: can AOL.com ramp up revenue to anywhere near what AOL proper has done?

Said another way: Would Wall Street value AOL.com on a par with AOL's online service? If most of the revenue is access, then plenty of ISPs trade on a lot less verve.

WEBDEX, Web User/Page View Index

Web Property January Market cap Value Average Daily Value Per
Web Brand Users or est. PMV * Per Page Views Page View
  (millions) (millions) User (millions)  
Yahoo 27.9 $ 2,660 $ 98.19 65 $ 40.92
Netscape.com* 21.4 $ 600 $ 27.99 35 $ 17.14
Microsoft.com* 15.7 $ 1,000 $ 95.70 35 $ 28.57
Excite 15.2 $ 662 $ 46.21 27 $ 24.50
Infoseek 11.7 $ 410 $ 32.40 13 $ 32.83
AOL.com* 11.2 $ 1,000 $ 88.94 30 $ 33.33
GeoCities* 10.5 $ 325 $ 28.58 29 $ 11.21
MSN.com 7.2 $ 625 $ 83.71 22 $ 28.41
Lycos-Tripod 7.8 $ 533 $ 88.18 18 $ 29.61
AltaVista* 6.8 $ 350 $ 48.05 18 $ 19.44
TOTAL 135 $ 8,165 $ 637.96 $ 292 $ 265.97
AVERAGE 14 $ 816 $ 63.80 $ 29 $ 26.60
Source: company reports, RelevantKnowledge user survey, Mecklermedia analysis          
MarCap on 02.25.98          
WEBDEX is a creation of Mecklermedia          

For the larger sites such as Microsoft.com, it's nearly impossible to allocate an exact amount to the value since so many disparate elements make it up, ranging from the intangible mindshare to varied services including Expedia and CarPoint, to name a few. Yet relative to the others, a sense of its possible value emerges.

We anticipate that the larger brands here have an enormous advantage in the marketplace based on the ability to leverage awareness of themselves going forward. That's why an AOL.com, which is a blip on the radar today, scores higher than others. We believe its ability to outdistance the others must be built into today's value. It has a lead in overall marketshare, and access to capital and commerce opportunities that should be noted.

Will some sort of parity emerge in the numbers? As the Internet becomes more widespread, perhaps overall value per user decreases, but the sum of those users--the value of all of them combined--rises. That's Yahoo!'s bet. And that leads to opportunities such as the marketing deal Lycos (NASDAQ:LCOS) just signed with Electronic Newsstand for $10.5 million.

These kinds of agreements--trading cash for eyeballs for expected cash--could be indications of the future of e-commerce on the consumer side. And "buyer" takes center stage in the value equation.

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