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Site Values Climb: GeoCities Pulls Up WEBDEX

It's "Back to the Future" Web style. Let's compare what we thought GeoCities could do in terms of market cap and what it's done now that the public has had a chance to bat this one around.

>From the August 6th edition of Internet Stock Report:

"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."

Fast-forward to August 12, day two of GeoCities' walk on the wild side of Wall Street, and GCTY market cap divided by users showed $98 value per Websteader or $1.4 billion market cap, right in line with the estimate.

This time around we did some more abacus thumping and came up with a look at all of the top 10 Web sites vs. the average value per user. In other words, which sites trade above average and which trade below?

The table sayeth all:

Mecklermedia's

July

Aug 5

Aug 12

Aug 5

Aug 12

Percent

WEBDEX

Users

Market cap or PMV*

Market cap or PMV*

User

User

change

website value index

(millions)

(millions)

(millions)

Value

Value

Yahoo

26.6

$7,859

$8,935

$295

$336

13.7%

AOL.com*

22.0

$2,900

$3,000

$132

$136

3.4%

Excite

17.3

$1,950

$2,281

$112

$132

17.0%

Netscape.com*

17.6

$1,700

$1,800

$96

$102

5.9%

Microsoft.com*

18.6

$2,325

$2,400

$125

$129

3.2%

MSN.com/Hotmail*

16.3

$1,300

$1,400

$80

$86

7.7%

GeoCities

14.2

$557

$1,395

$39

$98

150.5%

Lycos

14.5

$989

$1,221

$68

$84

23.4%

Infoseek

12.2

$740

$893

$61

$73

20.7%

Disney.com*

9.7

$1,150

$1,250

$119

$129

8.7%

TOTAL

169.0

$21,470

$24,575

$1,128

$1,306

15.8%

AVERAGE

16.9

$2,147

$2,457

$113

$131

15.8%

) 1998 Mecklermedia (NASDAQ:MECK) - Internet.com; *PMV=private market valuation

If Yahoo! (NASDAQ:YHOO) traded at the average value per user it would fetch $3.4 billion market cap. But then Yahoo! is far from "average." Leadership deserves a premium and high expectations deserve high expectations. Excite (NASDAQ:XCIT) sits at the average.

Infoseek (NASDAQ:SEEK) continues to be the most undervalued vs. the group at -44% below the water mark. If Wall Street believed that Infoseek and Disney could be a good match and held SEEK at the peer level it implies a $1.6 billion firm. SEEK hummed along at $893 million, enjoying a 22% pop on news of its new shopper wizard acquisition yesterday.

Market cap

If valued at $131/user average

Current value % difference

vs. average

(millions)

from avg.

Yahoo!

$ 3,476.42

157%

AOL.com*

$ 2,876.95

4%

Excite

$ 2,264.56

1%

Netscape.com*

$ 2,301.38

-22%

Microsoft.com*

$ 2,426.86

-1%

MSN.com/Hotmail*

$ 2,129.15

-34%

GeoCities

$ 1,859.25

-25%

Lycos

$ 1,887.85

-35%

Infoseek

$ 1,587.01

-44%

Disney.com*

$ 1,260.70

-1%

) 1998 Mecklermedia  - Internet.com

When the new Disney-Infoseek portals and other Web efforts start to emerge, SEEK will start to get some respect. A combined DisneySeek Web valuation in our minds ought to approach Excite-like levels in value per user. Wall Street continues to look at SEEK in the rear-view mirror. Yes, it's technology-centric. But Disney isn't. The real question: Can Infoseek let Disney make the magic happen, unleash the beast in the Mouse?

When Microsoft debuts its all-in-one front door--MSN.com/Start/CarPoint/Expedia--the game will get more expensive. Who has the deep pockets in the group? Yahoo!-Softbank and Disney-Infoseek.

The others await big-media bucks to up the ante.

An interesting note: combined overall numbers for Microsoft.MSN/HotMail unduplicated users may already surpass Yahoo!'s and make it the number one site in reach. Infoseek-Disney may be third or fourth via that method and Lycos-WhoWhere/Angelfire could be third or fourth depending on how the numbers go. Next time.

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