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RealTime IT News

WEBDEX & More: Hot Stuff From Summer Internet World

The running of the bulls and now the stampeding of the cows. The average value per user for the top 10 Web sites in Mecklermedia's WEBDEX shows a drop of 4.5% the past week. We think some of these stocks simply got ahead of themselves, with an underlying sense of frothy valuations.

Consider that Web networks are up 400% to 500% from their 52-week lows, and maybe enough's enough until they can show revenue flow results. If they back it up, then watch out for the bulls.

WEBDEX, WebSite Value Index

Mecklermedia's

June

July 8

July 15

July 8

July 15

Percent

WEBDEX

Users

Market cap or PMV*

Market cap or PMV*

User

User

change

website value index

(millions)

(millions)

(millions)

Value

Value

Yahoo

30.4

$8,618

$8,413

$283

$276

-2.4%

AOL.com*

23.2

$2,900

$3,000

$125

$129

3.4%

Excite

18.9

$2,259

$2,182

$119

$115

-3.4%

Netscape.com*

18.5

$1,900

$1,800

$103

$97

-5.3%

Microsoft.com*

18.0

$2,400

$2,300

$133

$128

-4.2%

MSN.com/Hotmail

15.2

$1,450

$1,350

$95

$89

-6.9%

GeoCities*

14.8

$525

$500

$35

$34

-4.8%

Lycos

15.0

$1,436

$1,282

$96

$85

-10.7%

Infoseek

12.0

$1,080

$985

$90

$82

-8.8%

Disney.com*

10.0

$1,250

$1,150

$125

$115

-8.0%

TOTAL

176.1

$23,818

$22,962

$1,205

$1,151

-4.5%

AVERAGE

17.6

$2,382

$2,296

$121

$115

-4.5%

We believe the window for Netscape to become a significant force with Netcenter is closing, and that more alliances may be needed to extend its demographic with the wider offerings of the Web. Its release of Communicator 4.5 may help.

Unfortunately, its stock isn't as valuable a currency as it once was, so buying growth may be harder than it thinks, if that's the route it chooses.

While we like GeoCities' user base, we find its business model looking thin. Its users don't want ads thrust on their Web sites any more than a pile of junk mail dropped in their mailbox (snail or e-mail). Imagine creating your masterpiece Picasso and having big brand x slap an ad on it. Only Andy Warhol could do that. GeoCities? No.

For better or worse (mostly worse in terms of stock price lately), Infoseek (NASDAQ:SEEK) and Disney (NYSE:DIS) are joined at the forehead with their Web efforts. Somebody's crying siamese twin circus act. We think DisneySeek just hasn't unleashed the magic kingdom. You want to buy into Disney's Web presence? SEEK is it. Fantasy or Fantasia?

...We promised you highlights from Mecklermedia's (NASDAQ:MECK) Summer Internet World and here's a glimpse of what's hot from the largest Internet trade show in the midwest:

  • Highlighting a trend to provide professional services in a neat package, privately-held WellEngaged announced a series of customers including AT&T, CIO, Upside, T3 Media, and XOOM for its software and know-how to enable message board discussions.

  • At our investment session, "capital connections," co-sponsor Price WaterhouseCoopers announced its latest venture capital survey. We'll give you a more in-depth look at the session and who said what next week in Internet Stock Report. For now chew on this: First quarter 1998 posted record results--$460 million, 101 deals, up 54%. At that pace, 1998 will break records.

  • Under the radar and also privately-held comes AccuWeather. It serves weather info to more than 1,000 Web sites. Like sports or business, weather is one of those core offerings that people consume. This one is on our radar if it goes public.

  • How people use your Web sites is critical to knowing if your investment in creating and maintaining a site pays off. Enter Andromedia. More than 100 well-trafficked Web sites use its tools to track visitors. That means opening up commerce opportunities for those who use its software.

  • Contact Dynamics offers users the ability to click a link and instantly chat with company representatives or customer support. While not the only firm doing this, we believe that Web-based customer support and sales with live people via chat (and voice over IP via PC) may be commonplace in 12 to 24 months.



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