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RealTime IT News

Up 127% Year To Date: Top 10 Watchlist Beats Market

The broad market sneezed in August and Internet stocks caught a cold. But our top 10 Internet stocks to watch in 1998 are still up 127% since the year began.

ISP and AOL heckler Earthlink (NASDAQ:ELNK) topped the list this time around, up a phenomenal 234% since December 31.

Top 10 Watch List 1998

Share

Share

Percent

Up 127%

price

price

change

Company

Symbol

Our latest thoughts:

12/31/97

9/29/98

from 12/31

@Home

ATHM

Continues cable partnering

$25.13

$47.50

89%

AOL

AOL

Online & Internet king

$45.25

$117.38

159%

Concentric

CNCX

Circle or circled?

$8.88

$21.38

141%

Earthlink

ELNK

Sprint & more

$12.88

$43.00

234%

Infoseek

SEEK

Waiting for Go(dot)com

$10.75

$25.75

140%

Network Solutions

NSOL

Business services?

$13.13

$40.00

205%

Onsale

ONSL

Novelty wearing off

$18.00

$16.50

-8%

RealNetworks

RNWK

AOL gets Real

$13.88

$39.38

184%

Sportsline

SPLN

Needs TV boost

$10.75

$18.00

67%

US Web

USWB

Un-reinvent and grow

$9.38

$12.63

35%

TOTAL

168.00

381.50

127%

AVERAGE

16.80

38.15

127%

(c) 1998 Mecklermedia (NASDAQ:MECK) Internet.com

Of the 10, the only downer was Onsale (NASDAQ:ONSL), which pioneered auctioning of surplus goods on the Internet. The problem with Onsale was that bidding over and over to keep your bid active, trying to beat rivals, gets to be tiresome fairly quickly for busy people. It's entertaining the first time but sometimes you just want to buy something now and not have to keep upping the ante to stay in the bid.

Hot new IPO ebay's (NASDAQ:EBAY) model is a little more efficient, but we wonder how long people will enjoy bidding on new and used goods in a glorified garage sale. And Yahoo-Onsale's personal auction area, which just launched a few weeks ago, already shows signs of large numbers of users.

It's free while ebay's model relies on percentage of sales and a small fee to post the ad.

We all know what wins on the Web--free. In our view ebay's model appears out of synch and non-protectable as time draws on. To win it must make the service and process superior to rival efforts, worth the percentage hit on sales and fee.

Infoseek's (NASDAQ:SEEK) pending deal to sell 43% of itself to Disney (NYSE:DIS) only now bears some fruit. Wall Street's waiting for Godot, rather Go.com, the soon-to-debut joint effort from the tech-heavy Seek crew and the marketing magicians at Disney. SEEK posted 140% run since we selected it for the hot list, a great run.

But we would expect more bang for the buck after Disney stepped in. ESPNSportszone.com and Starwave will be under the SEEK umbrella as part of the agreement. Marketing has never been its strong point and it was the last search engine to go public, never getting the valuation of its peers. With Go.com and some aggressive TV-Web tie-ins perhaps it may yet become the Lion King in this space.

AOL (NYSE:AOL) was one of the few stocks to gain more ground since last time we checked in on the top 10 July 6. AOL shares have soared 159% year to date and plodded a small but steady 4% rise since July 6.

Against all odds, AOL now blends its own online service and the Internet into an almost seamless experience--almost. The ICQ buy adds eyeballs (more than 10 million users in its reach). And AOL finally reported its fiscal fourth quarter results which sqeaked out a $7.1 million net income despite acquisition charges.

Relatedly, RealNetworks (NASDAQ:RNWL) shares fell dramatically when its CEO blasted Microsoft before the Senate. Intel stepped in as a partner of sorts when Real licensed its media streaming software.

A bundling deal with AOL for its 4.0 software just days ago could put Real's players in the PCs of some 13 million AOLers eventually and make it a key part of AOL's multimedia solution. Said another way, RealNetworks signed two gorillas in the gorilla war it fights with Microsoft over the future of Internet video-audio software.