RealTime IT News

Internet Market Close Report for 1998.06.08

  08-Jun-98 point change % change
ISDEX 135.04 2.54 1.92%
ISDEX Price Wtd. 1,381.13 36.94 2.75%
NASDAQ 1,787.77 4.85 0.27%
DJIA 9,069.60 31.89 0.35%

  • AOL (NYSE:AOL) agrees to acquire Israeli-based Mirabilis, maker of instant messaging product ICQ, for $287 million cash. ICQ is the pioneering instant messaging service/software for the Web that notifies users when friends and colleagues are on the Web at the same time and allows them to chat or exchange files in real-time. The deal values ICQ registered users at $23.92 each according to our analysis. AOL may also pay more based on growth targets in the next few years.

    The price looks high but consider that the Mecklermedia WebSite Value Index shows an average value per user of the top 10 sites at about $70 each--time for new term to describe this opportunity: webitrage (buying privately for less than you can sell publicly). Translation: AOL buys new users at $24 and sells them at more than $70 to Wall Street. AOL shares up $1.50 to $84.75 today. By the way, we think AOL got a coup here, that the portal sites should have snapped up ICQ for the same "webitrage" reason, and they need users more than AOL.

  • Yahoo (NASDAQ:YHOO) agrees to acquire Web store software maker Viaweb for $49 million stock and use the new firm's product to built out its Yahoo Store area with design, hosting, and other commerce services. Yahoo needed some new revenue flow and this looks like a good fit - stores = commerce = business = a lot of swirling through Yahoo from buyers and sellers.

  • Mindspring (NASDAQ:MSPG) gets upgraded to "buy" from "outperform" by Wheat First based on discount to AOL in the ISP space. We think both MSPG and Earthlink (NASDAQ:ELNK) could find some room to run by year's end, in the belief that "dial up" is becoming the least of what an ISP will provide in the not-too-distant future. More on ISPs this week in Internet Stock Report.


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