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Welcome Cisco, ebay & Beyond.com ISDEX Adds Three New Stocks

Cisco has been on our radar for eons as the leader in networking solutions but as network and Internet become interchangeable (there are no closed systems in the future, everything will be "Internetted"), it now occupies a prominent spot as leading plumber of the continued rollout of the Web.

ebay takes honors as pioneering a new e-commerce model that puts people together for personal auctions and gets out of the way as easy as possible, which is easier said than done. Proof that we see new ideas that can compete with the AOLs, Amazons and Yahoos of the world.

Beyond.com wins the rhyme award for changing its name from the generic "Software.net," although we're still trying to figure out what "beyond" it refers to (maybe they just wanted a rhyming sound). Beyond.com sells software via the Internet with the slogan "the Software Superstore." We'll see if it can become the leader with the half dozen rivals who say the same thing.

Overall ISDEX value has been adjusted to reflect the change with the benchmark being the same, December 31, 1996 at 100. Also, the computing of ISDEX is now an arithmetic average rather than a geometric average to put it closer to the price volatility and investor's preferred method of tracking it.

The update further establishes ISDEX as the world's leading Internet stock index followed literally on every continent and more nations than we can list without sounding like the United Nations.

We thank you for making it so and continue to look for ways to innovate this space to empower both retail and institutional investor, industry exec and venture capitalist with original analysis and the only index as current as the Internet itself.

Earnings (or lack thereof) drives most of the stocks, as third quarter results start popping out. Who's hot and not October 6 - 13:

ISDEX ®   13-Oct-98 % change Point change % change
The Internet Stock Index   close from from from
www.isdex.com     06-Oct-98 06-Oct-98 31-Dec-97
          or from IPO*
ISDEX Arithmetic Average   124.73 -7.3% -9.87 24.9%
ISDEX Price Wtd. Composite   1,314.28 -6.8% -96.03 43.5%
NASDAQ   1,509.45 -0.1% -1.38 -3.9%
DJIA   7,938.14 2.4% 187.44 0.4%
           
Exodus* EXDS $23.38 38% $6.38 56%
RealNetworks RNWK $33.38 37% $9.00 141%
Mecklermedia MECK $26.63 21% $4.69 7%
N2K NTKI $5.44 21% $0.94 -63%
Network Associates NETA $31.25 12% $3.25 -41%
Verisign* VRSN $28.38 11% $2.75 103%
Inktomi* INKT $79.25 10% $7.19 340%
Cisco CSCO $50.69 10% $4.50 36%
Concentric CNCX $19.63 9% $1.63 121%
Broadvision BVSN $12.50 5% $0.63 92%
Broadcom* BRCM $67.94 4% $2.44 183%
Axent AXNT $15.44 3% $0.44 -11%
CheckPoint Software CHKPF $15.81 0% $0.00 -61%
Earthlink Network ELNK $36.25 -3% -$1.00 182%
Security First Technologies SONE $12.50 -4% -$0.50 72%
Security Dynamics SDTI $8.28 -4% -$0.34 -77%
Spyglass SPYG $10.69 -5% -$0.56 116%
@Home Network ATHM $41.50 -5% -$2.25 65%
America Online AOL $92.25 -6% -$5.38 104%
Netscape NSCP $17.75 -7% -$1.31 -27%
Lycos LCOS $27.50 -9% -$2.63 33%
VocalTec VOCLF $6.50 -10% -$0.75 -68%
CDnow CDNW $7.69 -11% -$0.94 -52%
Verio* VRIO $17.50 -11% -$2.25 -24%
CKS Group CKSG $12.50 -12% -$1.63 -12%
Open Text OTEXF $11.25 -12% -$1.50 -16%
Yahoo! YHOO $109.94 -12% -$14.88 218%
ISS Group* ISSX $21.00 -13% -$3.00 -5%
Open Market OMKT $5.25 -13% -$0.75 -45%
CMG Info CMGI $41.50 -13% -$6.06 174%
Broadcast.com* BCST $37.00 -13% -$5.50 106%
PSINet PSIX $11.75 -15% -$2.00 129%
Excite XCIT $32.94 -15% -$5.75 120%
Network Solutions NSOL $30.75 -15% -$5.50 134%
Amazon.Com AMZN $91.38 -16% -$16.94 203%
USWeb USWB $8.75 -17% -$1.81 -7%
E*TRADE EGRP $13.00 -18% -$2.81 -43%
Infoseek SEEK $19.75 -18% -$4.38 84%
Doubleclick DCLK $17.19 -19% -$3.94 1%
Mindspring MSPG $27.25 -19% -$6.25 143%
ebay EBAY $29.38 -20% -$7.13 63%
GeoCities* GCTY $18.31 -20% -$4.56 8%
CNET CNWK $34.94 -20% -$8.75 131%
CyberCash CYCH $7.13 -20% -$1.81 -44%
Beyond.com BYND $7.25 -21% -$1.88 -19%
Egghead.com EGGS $5.13 -21% -$1.38 -21%
Onsale ONSL $13.50 -27% -$4.88 -25%
IDT Corp IDTC $13.00 -31% -$5.75 -36%
24/7 Media* TFSM $6.38 -33% -$3.13 -54%
Sportsline USA SPLN $9.13 -44% -$7.25 -15%
* change from IPO 1998          
TOTAL   1,314.28 -7% -96.03 44%
SIMPLE AVERAGE   26.82 -7% -1.96 44%

News behind the moves:

  • 98.10.13 - Security Dynamics (NASDAQ:SDTI), long oversold by some accounts, gets some interest today based on it meeting third quarter earnings estimates of $0.10 EPS. Revenue reaches $40.8 million vs. $35.9 million 3Q97. SDTI also announced a 4 million share buy back.

    No surprise to us: its $154 million cash and marketable securities implies a $185 million enterprise value. On an annualized basis, that's barely more than 1x revenue, in a world where software trades at 3x to 5x. Potential takeover bait in our view and probably long overdue. Prudential has a "strong buy" on SDTI.

  • 98.10.13 - Broadcast.com (NASDAQ:BCST) reports $4.5 million revenue for 3Q98 vs. $1.9 million 3Q97. Loss reaches $3.9 million vs. $1.9 million 3Q97.

  • 98.10.12 - RealNetworks (NASDAQ:RNWK) signs Lotus (NYSE:IBM) as an outlet and strategic ally for its G2 video-audio player. The move follows Real's deal with AOL (NYSE:AOL) to deploy its player on the AOL online service. Between the two we estimate Real may have opened up about 15 million to 20 million universe of users. Assuming some already use a Real product, we estimate it may represent a net new potential user base of about 10 million.

  • 98.10.12 - Earthlink (NASDAQ:ELNK) reports third quarter revenue of $49.8 million vs. $21 million 3Q97. Net loss before charges smaller than expected at $1.1 million or loss per share of $0.04. The ISP also announced a lineup of content partners at Internet World to make it stickier than your average ISP.

  • 98.10.09 - Amazon.com (NASDAQ:AMZN) plans on launching a book retail Web service aimed at the German market, in the heart of Bertelsmann's media empire. Bertelsmann, you may recall, agreed to invest $200 million in barnesandnoble.com just days ago. The German media giant (as large as Time Warner) also expands its own BOL service next month in Germany, the UK, France, Spain and the Netherlands.

  • 98.10.08 - Mecklermedia (NASDAQ:MECK), producer of this report, agrees to sell for $29 per share cash to Penton Media (NYSE:PME) for about $274 million total. On merger completion, Chairman and CEO Alan Meckler agrees to acquire an 80.1% stake in Internet.com (Mecklermedia's Website).

    The deal is expected to be completed in November and has been approved by both boards. Penton owns and operate more than 60 trade shows and publishes trade titles. With the acquisition it will have about 100 trade shows with Mecklermedia's stable of Internet World and ISPCON events and Internet World print newspaper.

  • 98.10.07 - N2K (NASDAQ:NTKI) gains 22% to $5.50 per share on news it may merge with CDnow (NASDAQ:CDNW) in a stock swap. The combined firm would have about 50% of the Web-based music sales market. CDNW shares end slightly up at 2% to $8.125 per share. We think the move is a good one and that acquisition by a larger player--a barnesandnoble.com perhaps--would really be a one-two punch after its stock, and CDnow's, have both been taking jabs all year long.