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Who's Betting On the Web? Readers Ask Who the Content Players Are

We were all prepared to do an inside look at Inktomi's initial public offering for today's report when a flood of e-mails arrived in response to yesterday's Morning Report that asked us who are the content players on the Internet?

As Internet navigation stocks have skyrocketed, it seemed the content producers, the ones that drive people to go on the Internet in the first place, were left holding the bag.

For comparison sake, the list below shows two navigation stocks--Yahoo! and Lycos--just to get a sense of where the multiples may be for them this year.

The three content plays we show are next: Sportsline (NASDAQ:SPLN), CNET (NASDAQ:CNWK), and Mecklermedia (NASDAQ:MECK), producer of this report.

Web-based Content Producers

Company Internet Ticker Market Est. '98 Revenue
  Business Symbol cap revenue multiple
Yahoo Content network YHOO $ 5,884 $ 140 42
Lycos Content network LCOS $ 1,220 $ 53 23
Sportsline Content producer SPLN $ 608 $ 34 18
CNET Content producer/conferences CNWK $ 534 $ 65 8
Mecklermedia Content producer/trade shows, conferences MECK $ 208 $ 65 3
all figures in millions except multiples

SportsLine traffic has grown dramatically from 4Q96 to 4Q97, up 251% to an average 2.8 million page views. It counts 45,500 members on its sports service. As we said in ISR January 15, the best thing Sportsline did to date was the deal with CBS for eyeballs.

CBS and Sportsline inked a $57 million agreement where CBS would promote Sportsline as the Web sports site that TV viewers could go to for more sports info. If you watched the Olympics you know how powerful that could be. Don't forget, however, that as soon as SPLN posts positive earnings, a ton of warrants become active and dilute the shares outstanding.

Meanwhile, CNET (NASDAQ:CNWK) has been busy trying to be a one-stop Internet shop for technology industry content, search, directories, etc. It recently inked deals with ABCNews.Com to provide it technology news and launched the ambitious SNAP! Web directory and search service last September.

We don't have any numbers from CNET on SNAP! and await some sort of meaningful account for how this effort is going. CNET also dabbles in the conference space, leveraging off its many Web sites, a great depth of content.

Since Mecklermedia produces this report we won't get into it too far (gotta be neutral!), but consider its Web site delivers more than 14 million page views per month to high-income Internet professionals (more than 500,000 people estimated) on its Internet.com network of 14 Web sites.

The only print title it still publishes, Internet World trade newspaper, is read by more than 125,000 readers each week. Central to its revenue and earnings, there are now 27 Internet World trade shows held in 23 countries. Tradeshow Week named Internet World trade shows "the fastest-growing shows in tradeshow history."

But do your own homework here. Look at the balance sheets and pull out the abacus and decide if content is king, if not now then when? Distribution and aggregation (which we discussed in yesterday's ISR) are valuable but what are they distributing and aggregating if not content?

Next week we'll delve into Inktomi's planned IPO.