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Radioactive WEBDEX: Top 10 Sites User Value Off 21%

The Moscow-inspired market blast rumbled through the global stock market and wiped out 21% of the value of the top 10 Web sites, bringing WEBDEX (Website user valuation index) to an average of $105 per user.

Market fallout radiated more than just white flashes across the Internet stock landscape; it blipped across the top 10 Web site valuations per user, leaving them with a 21% drop overall since August 26. The past two trading sessions brought back 12%, meaning at one point the WEBDEX value per user average was down more than 30% since last Thursday.

Biggest decliner? Infoseek (NASDAQ:SEEK), trading amazingly close -- for the whole works--to what Disney paid for just 43% of the firm recently ($430 million).

The continued drop for SEEK remains something that perhaps only those inside the Mouseketeer hangout can explain. Annette Funicello, where are you when SEEK needs you? Here's the vapor trail August 26-September 2:

Mecklermedia's

July

Aug 26

Sept 2

Aug 26

Sept 2

Percent

WEBDEX

Users

Market cap or PMV*

Market cap or PMV*

User

User

change

(millions)

(millions)

(millions)

Value

Value

Yahoo

26.6

$9,076

$7,284

$341

$274

-19.7%

AOL.com*

22.0

$3,200

$2,500

$145

$113

-21.9%

Excite

17.3

$2,004

$1,409

$116

$81

-29.7%

Netscape.com*

17.6

$2,000

$1,600

$113

$91

-20.0%

Microsoft.com*

18.6

$2,600

$2,200

$140

$118

-15.4%

MSN.com/Hotmail*

16.3

$1,500

$1,250

$92

$77

-16.7%

GeoCities

14.2

$958

$719

$67

$50

-25.0%

Lycos

14.5

$1,408

$966

$97

$67

-31.4%

Infoseek

12.2

$816

$594

$67

$49

-27.2%

Disney.com*

9.7

$1,400

$1,200

$145

$124

-14.3%

TOTAL

169.0

$24,962

$19,721

$1,324

$1,045

-21.1%

AVERAGE

16.9

$2,496

$1,972

$132

$104

-21.1%

User tallies per www.rkinc.com *PMV = private market valuation estimate for Web asset only based on financials, reach, users, brand value, peers, mergers and acquisitions, marketplace 
(c) 1998 Mecklermedia, Internet.com (NASDAQ:MECK)

SEEK value per user trades in line with the good-neighbor folks at Geocities (NASDAQ:GCTY), which holds potential as one of the more popular consumer places to hang out a welcome mat or shingle. Affinity holds more promise than meets the eye.

Here's another look at valuation from another angle, discounting ahead some of the revenue for the group. On a revenue multiple basis, we ran our 1999 estimated top line results for the above companies and came up with an average 14x forward (as in 1999) revenue multiple.

AOL in its latest quarter generated 16% of revenue from non-access, some of which was from AOL.com, although it's not broken out. We think AOL.com could start to post more significant percentages with revenue for 1999 (calendar) approaching $250 million. If so, that implies a 10x forward multiple for our valuation of AOL.com.

YHOO tops the list at about 28x estimated forward revenue, GCTY estimate may be 24x if it can do business-wise what it's done Webwise, namely turn users into revenue. Meanwhile, NSCP (Netcenter) revenue alone could approach $200 million, though if its growth and features continue, implying an 8x forward revenue multiple valuation.



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