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Helium Zone: WEBDEX Gains 15% Led By Lycos

ISDEX, Wall Street's starting to believe in a little arachnophoria as Lycos value per user shot up 32% to $151 since November 11 as the former search engine begins building a Web network of various sites.

Lycos' (NASDAQ:LCOS) buying spree of Whowhere/Angelfire (directory/Websteader), Tripod (Websteader for Generation Y) and Wired Digital (HotBot search and content) all brought Lycos' monthly unique user value up to the top 4 slot in Media Metrix' October tally of the top Web properties.

Ironically, as the user value dropped at leader Yahoo (at least according to Media Metrix), its market capitalization soared even higher, and with it the WEBDEX user value to $744, far dwarfing any of the other sites in WEBDEX.

Internet.com's October Nov 11 Nov 18 Nov 11 Nov 18 Percent
WEBDEX Users Market cap or PMV* Market cap or PMV* User User change
  (millions) (millions) (millions) Value Value  
Yahoo 25.2 $15,458 $18,764 $613 $744 21.4%
AOL.com* 24.4 $3,600 $3,870 $148 $159 7.5%
Microsoft.com* 20.5 $2,350 $2,500 $114 $122 6.4%
Lycos 18.3 $2,099 $2,768 $115 $151 31.9%
Excite 15.5 $2,490 $2,745 $160 $177 10.2%
Netscape.com* 15.7 $2,200 $2,350 $140 $150 6.8%
MSN.com/Hotmail* 17.8 $2,250 $2,400 $126 $135 6.7%
GeoCities 14.9 $1,156 $1,328 $78 $89 14.9%
AltaVista 11.13 $750 $800 $67 $72 6.7%
Infoseek 10.9 $1,018 $1,164 $94 $107 14.3%
TOTAL 174.4 $33,371 $38,689 $1,655 $1,905 15.1%
AVERAGE 17.4 $3,337 $3,869 $166 $191 15.1%
AVG. without Yahoo 16.6 $1,990 $2,214 $116 $129 11.4%
The average for the entire group was $191. Without Yahoo (NASDAQ:YHOO) the average hit a much tamer $129. Yahoo on a WEBDEX basis is starting to approach AOL-like valuations, and we're not talking AOL.com--AOL (NYSE:AOL) the whole kit and kaboodle.

And for those who keep fighting the tape on Yahoo, we have always believed its value was a tad high but our hunch is that Yahoo could see AOL-like valuations within the next 18 months.

Netscape.com (the Web asset only) value-per-user also pops up after the buzz that it may do a deal with AOL made the rounds. Netscape also acquired Yahoo-clone NewHoo (a people-maintained Web guide). Terms undisclosed but hopefully cash for the sake of NewHoo.

Netscape (NASDAQ:NSCP) shares rally to close at near $40 November 18. We've long held that AOL should acquire the business-centric Netscape Netcenter Web site.

We don't think AOL users are very heavy Netcenter users. And Netscape could finally step out from 'he said-she said' business model it operates under--part software firm, part content firm. Fair value for Netscape.com? We estimate $2.35 billion, in line with the search/guide group (sans Yahoo). It would give AOL the number one consolidated reach Web site by far that we estimate could be about 40 million monthly users.

Besides, it could be another chance to create a voice slogan "you've got Netscape," that's got to have some value itself.

Making its re-entry on WEBDEX is AltaVista, remember it? This is the once powerful, brawn over brain search engine that used to be Yahoo's engine de jour before Inktomi (NASDAQ:INKT) did it one better.

Now under Compaq's (NYSE:CPQ) rule after it acquired Digital, we believe AltaVista has to come back from the 'WWF wrestling, we can index the entire Web' (and still wear spandex) mode of mentality to more of here's just the good stuff that you find good, 'good' being relevant.

Which brings us to a point of pondering--even these top 10 Web sites have a long way to go to get really relevant, granulated. They keep making assumptions about what users want. Just imagine if they delivered the brand new things that users would want if they were available.

Sort of like imagining the difference between black and white TV and color TV, color TV to VCR, VCR to DVD. People only want the better thing once they use it and compare it to the previous thing. And then consider what WEBDEX valuations would be.