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GeoCities IPO Next Week: WEBDEX Values Go North and South

High-flyer Internet site values may be losing some of their luster as investors start poking up-and-comers in a race to get in on growth rather than ride the tide too late.

Anecdotal evidence comes via our abacus tweaking that shows average value for the top 10 Web sites could be $107 per user, up 1.5% since July 29. But the top two sites dropped slightly as others climbed.

With GeoCities possibly going public next week we think the time may be right to consider what this fast-growing "Websteader" may debut at after pricing.

Mecklermedia's June July 29 Aug 5 July 29 Aug 5 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 $8,130 $7,859 $267 $258 -3.3%
AOL.com* 23.2 $3,000 $2,900 $129 $125 -3.3%
Excite 18.9 $1,774 $1,950 $94 $103 9.9%
Netscape.com* 18.5 $1,650 $1,700 $89 $92 3.0%
Microsoft.com* 18.0 $2,200 $2,325 $122 $129 5.7%
MSN.com/Hotmail 15.2 $1,250 $1,300 $82 $86 4.0%
GeoCities (est. IPO) 14.8 $557 $557 $38 $38 0.0%
Lycos 15.0 $958 $989 $64 $66 3.3%
Infoseek 12.0 $742 $740 $62 $61 -0.3%
Disney.com* 10.0 $1,100 $1,150 $110 $115 4.5%
TOTAL 176.1 $21,361 $21,470 $1,057 $1,073 1.5%
AVERAGE 17.6 $2,136 $2,147 $106 $107 1.5%
* PMV=private market valuation determined by industry comparables, market share, brand value, revenue, marketplace, and other material factors. (c) 1998 Mecklermedia (NASDAQ:MECK), Internet.com

Consider that if we apply Infoseek (NASDAQ:SEEK) value per user of $61 to GeoCities--which grows faster and has more users--then that implies a possible GeoCities market cap north of $910 million. That may be a tame 63% bump from its current price target and IPO cap. Tame in relation to Broadcast.com's (NASDAQ:BCST) IPO which screamed 279% its first day.

BCST priced at $18 on July 17 and has traded as high as $74 in its few brief weeks of public life.

On August 5 BCST closed at $50, still 178% from its IPO price. Its market cap hovers around $844 million and Broadcast.com is nowhere near the top 10 Web sites in users. Meanwhile, GeoCities actually climbed from seven to number six for July according to Relevant Knowledge.

GeoCities valuation estimate at an average $91 for the top nine sites (not counting Yahoo!) could be $1.3 billion cap. Using our overall $107 average brings the possible valuation to $1.6 billion. GeoCities could ignite values again for these top sites and those nipping on the heels, the top 25 sites.