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Growth Factor: WebDex Shows Value Per User Softening

Wall Street's on-again, off-again love affair with Internet stocks seems to be more based on emotion than metrics--one reason why we created WebDex, which tracks market cap per user. The good news is that growth at each of the top Web firms continues while value per user falls somewhat, meaning that common sense is creeping into the equation.

Said another way, is a Yahoo user worth $115 versus an average of $60 for the group shown? Yes, brand value counts and market/mindshare do also. But that's a lot of expectation built into the firm.

Excite and MSN.com show the biggest jump in users between January and February. But the market cap or private value doesn't match the growth, unlike Yahoo, whose market cap and value per user have grown in sync and held consistent in the past month.

AOL.com comes on strong in users and we allocate a private market value (PMV), since it's not a separate balance sheet item yet, of $1 billion. Most of that stems from built-in leverage from the AOL brand and eyeball brigade.

Within 24 months we wouldn't be surprised if AOL.com becomes AOL itself or vice versa. The Web wins the platform war. And AOL saves from having to maintain its own proprietary platform. Wasted dollars there.

Our latest tally:

WEBDEX: Internet User Values

WEBDEX       March 3 March 11   March 3 March 11
Web Property February January Percent Market cap Market cap Percent Value Value
Web Brand Users Users change or est. PMV * or est. PMV * change Per Per
  (millions) (millions)   (millions) (millions)   User User
Yahoo 31.3 26.7 17% $ 3,087 $ 3,631 18% $ 115.62 $ 116.01
Netscape.com* 23.1 20.7 12% $ 625 $ 650 4% $ 30.19 $ 28.14
Microsoft.com* 17.9 15.6 15% $ 1,000 $ 1,100 10% $ 64.10 $ 61.45
Excite 16.5 12.5 32% $ 777 $ 814 5% $ 62.18 $ 49.35
Infoseek 13.7 11.6 18% $ 479 $ 504 5% $ 41.29 $ 36.76
AOL.com* 14.1 11.2 26% $ 1,000 $ 1,100 10% $ 89.29 $ 78.01
GeoCities* 12.5 10.4 20% $ 225 $ 250 11% $ 21.63 $ 20.00
MSN.com 8.3 6.3 32% $ 500 $ 550 10% $ 79.37 $ 66.27
Lycos 10.2 7.8 31% $ 606 $ 603 -1% $ 77.71 $ 59.11
AltaVista* 7.6 6.7 13% $ 250 $ 250 0% $ 37.31 $ 32.89
TOTAL 155 130 20% $ 8,549 $ 9,452 11% $ 66.02 $ 60.90
AVERAGE 16 13 20% $ 855 $ 945 11% $ 66.02 $ 60.90