RealTime IT News

User Values Up: WEBDEX Finds New Year Legs

Scenes of Forrest Gump finding legs and running trans-global come to mind with the kind of stride WEBDEX has had this year so far. This week's box of chocolates goes to GeoCities(NASDAQ:GCTY) which finally sees some e-commerce coming its way.

The pioneering Websteader inked a deal with Be Free to add buying and selling services for its 3.3 million members who've built about 30 million Web pages. Be Free lets people sell affiliate merchandise on their Web sites. Presciently, we had highlighted "community" as one of our Top 10 to watch in 1999 on January 6 on the notion that real people matter. Matter means buy and sell.

Let's see leading Web sites rankingand value per user the past week:

Internet.com'sNovemberJan 6Jan 13Jan 6Jan 13 Percent
WEBDEX Users Market cap or PMV* Market cap or PMV* User User change
 (millions) (millions)(millions)ValueValue 
AOL.com* 30.35 $6,500$7,000$214$2317.7%
Microsoft.com* 27.75 $7,500$8,500$270$30613.3%
Yahoo 27.28 $28,719 $36,318$1,053$1,33126.5%
Lycos 25.66 $2,834$4,163$110$16246.9%
GeoCities 18.16 $1,075$2,170$59$120101.9%
Excite 17.02 $2,631$3,579$155$21036.0%
Netscape.com* 16.99 $3,100$3,400$182$2009.7%
Disney.com 14.51 $3,000$3,200$207$2216.7%
Infoseek 11.49 $1,645$2,384$143$20844.9%
AltaVista 10.91 $600$650$55$608.3%
TOTAL 200.1 $54,302 $57,604$2,316$2,4495.7%
AVERAGE 20.0 $5,430$5,760$232$2455.7%
AVG. without Yahoo 19.2 $3,013$3,209$147$1555.8%

Most surprising move in the group comes from Compaq (NYSE:CPQ), whichowns Alta Vista. Compaq agreed to acquire shopping site Shopping.com for $220 million cash, or about 41x estimated 1998 sales. We think Compaq was willing to pay a premium here for the technology and the timefactor. While others have built up Web sites into powerhouses, Compaqhas, until now, let Alta Vista ride on auto pilot.

If Alta Vistaintegrates Shopping.com for each of its millions of daily searches and shopping sales for Shopping.com could triple for 1999. With that, our value per Alta Vista reflects some of the discounted value being built into Alta Vista today. King of the marketing move AOL (NYSE:AOL), meanwhile, plans on taking its disks to the streets literally with a door-to-door with a 'Tupperware' type scheme where people earn commissions for selling AOL to new users. The online giant also signed an agreement with BellAtlantic for high- speed service.

Infoseek (NASDAQ:SEEK) got some get up and go with the launch of the go.com. Long time coming. We're still in the belief that go.com needs some more creative juice flowing. Michael Eisner is now an "Internet guy" also - put a few Disneyland character actors on the project and perhaps it'd find a new angle other than 'let's make it look like everyone else.' With or without Disney, though, it's easy to forget that Infoseek technology, and this is something Steve Kirsch (founder) excelsat, is strong.

Our analysis also compares the top 10 Web sites vs. each other on average WEBDEX value, yielding some gaps that highlight the perceived value among the group. One observation: despite gaining 47% Lycos (NASDAQ:LCOS) users are still valued at 66% of the WEBDEXaverage.

GCTY users trade about half the average while Yahoo(NASDAQ:YHOO) users trade at 544% of the others. The gaps between these user values has been greater in the past so the move to a tighter range appears to be on the way.