dcsimg
RealTime IT News

Spiderella? Lycos Value Per User Jumps Almost 10%

Website values continue to hop and drop at the whim of a Wall Street enamored by Cinderella stories. The latest to put on the magic glass slippers: Lycos, up 9.5% in value per user in our latest WEBDEX survey.

LCOS ran on its buying spree in the community space, improved margins for latest quarter, and made a pro forma move to offer more than search and guides.

Earlier in the year Wall Street rewarded Excite's hunter-gatherer dance and deal mentality with a bump and jump in market capitalization and hence, value per user. With its aggressive write down deal with Netscape, however, Excite has lost some of its luster the past week.


Mecklermedia's

July

Aug 19

Aug 26

Aug 19

Aug 26

Percent

WEBDEX

Users

Market cap or PMV*

Market cap or PMV*

User

User

change

(millions)

(millions)

(millions)

Value

Value

Yahoo

26.6

$8,923

$9,076

$335

$341

1.7%

AOL.com*

22.0

$3,100

$3,200

$141

$145

3.2%

Excite

17.3

$2,201

$2,004

$127

$116

-9.0%

Netscape.com*

17.6

$1,900

$2,000

$108

$113

5.3%

Microsoft.com*

18.6

$2,500

$2,600

$135

$140

4.0%

MSN.com/Hotmail*

16.3

$1,500

$1,500

$92

$92

0.0%

Lycos

14.5

$1,286

$1,408

$89

$97

9.5%

GeoCities

14.2

$1,054

$958

$74

$67

-9.1%

Infoseek

12.2

$875

$816

$72

$67

-6.8%

Disney.com*

9.7

$1,300

$1,400

$135

$145

7.7%

TOTAL

 

$24,639

$24,962

$1,307

$1,324

1.3%

AVERAGE

16.9

$2,464

$2,496

$131

$132

1.3%

User tallies per www.rkinc.com *PMV = private market valuation estimate for Web asset only based on financials, reach, users, brand value, peers, recent mergers and acquisitions  (c) Mecklermedia, Internet.com


A few months ago we were one of the first to raise eyebrows and discuss in the Internet Stock Report about Excite swallowing the cost in a one-time gulp on its balance sheet. That hurts earnings today but helps them tomorrow since the cost is behind Excite.

Recall April 29 when Excite agreed to pay Netscape $86 million cash/stockwarrants to offer its services on Netscape.com. The odd part is that XCIT looks like it's taking a hit on its stock value from doing so now, rather than right after July 16 when it wrote down $56.8 million related to the Netcenter partnership.

In the Excite-Netscape deal we think Netscape could emerge the winner of the two anyway, as it makes its site stickier with guide services in the store, rather than sending its users into the search wilderness. Note the latest $113 per user allocated to Netscape.com as a result.

Also driving that: Despite what many say, Netscape's browser still leads in marketshare, eyeballs and orbs that continue to ogle the default site. Call it "Mozilla's Law" - inertia of the default home page driving traffic and revenue. Not quite the Godzilla of 1995 but a large traffic lizard nonetheless.

Since going public a few Web pages ago, GeoCities (NASDAQ:GCTY), meanwhile, takes a hit in value per user since August 19. We attribute this to investors debating the FTC news item, as the novelty of being public wanes, and the market itself treats the Dow Jones Industrial Average itself like an Internet stock it's so volatile--let alone a newbie stock like GCTY. It comes with the territory.

GeoCities also may have a thing or two to prove revenue-wise before Wall Street jumps on board in a big Yahoo-like way.

Infoseek (NASDAQ:SEEK) continues to be Infomeek as user value declines to $67. Ironically, we believe equity partner Disney.com valuation may be on the rise--you have to discount ahead Disney's marketing and content treasure trove somewhat in its Web efforts.

How many of the above firms can place a URL on every film, every ABC TV show or network promo, every book, poster, lunch box, toy, ticket, ride, game, apparel item, etc., to point to a Web content or commerce pitch? One. Disney. Microsoft would love that position.

As for why SEEK shares have not risen dramatically since June 18 when Infoseek sold a 43% stake to Disney, we think that if they keep falling perhaps Disney may acquire the 67% it doesn't own. We think keeping SEEK public makes more sense, maybe changing the name: DisneySeek.com, for the semantically-challenged investor. Apparently the magic kingdom (Disney.com/Infoseek) by any other name is not the magic kingdom in valuation, yet.