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Go2Net Goes to Town

Sometimes a company name can be prescient as in the case of Go2Net, which Paul Allen invested in this week and did just that. The inspired move sent Go2Net (NASDAQ:GNET) shares going ballistic, up 48% the past week and 612% year to date.

Allen agreed to invest $750 million in Go2Net for a 54% stake. Allen's Vulcan Venture unit invested $300 million in convertible preferred and the venture firm will also make a tender offer for 5 million shares of GNET at $90.

Just when you thought the top 10 Web sits in the world dominated the deal action this agreement vaults Go2net into the same cash league as Yahoo, with a great partner in Allen, who owns cable, motion picture and Internet interests.

As one of my ones to watch in 1999 it has been an exciting move so far. The second-biggest shaker since March 9 was Verio (NASDAQ:VRIO) which cut a deal with orb and on-ramp leader AOL. Verio will pay AOL more than $40 million to become AOL's hosting service. Revenue splits make the deal make sense for Verio, up 33% on the sanctioning by the online leader.

Overall the ISDEX was up 7.4%, leading the Dow and NASDAQ. Year to date numbers are 81% for ISDEX, making the other two indices reflective of eras gone by. Let's see the numbers:

ISDEX ®   16-Mar-99 % change Point change % change
The Internet Stock Index   close from from from
www.isdex.com     02-Mar-99 02-Mar-99 31-Dec-98
           
ISDEX   518.86 7.4% 35.71 81.0%
NASDAQ   2,439.27 1.9% 46.33 11.2%
DJIA   9,930.47 2.4% 236.74 8.2%
           
Go2Net GNET $126.00 48% $41.13 612%
Verio VRIO $48.69 33% $12.13 118%
CyberCash CYCH $16.00 33% $3.94 7%
Network Solutions NSOL $262.00 28% $57.06 100%
RealNetworks RNWK $115.00 25% $22.88 221%
Doubleclick DCLK $130.50 19% $21.25 193%
Infospace.com INSP $77.00 19% $12.50 102%
Exodus EXDS $116.25 19% $18.25 81%
Netscape NSCP $94.06 18% $14.56 55%
Broadvision BVSN $61.00 17% $9.00 91%
America Online AOL $104.94 16% $14.81 35%
PSINet PSIX $40.75 16% $5.63 95%
E*TRADE EGRP $56.88 15% $7.31 143%
Cyberian Outpost COOL $21.38 14% $2.69 -22%
Earthlink Network ELNK $73.28 12% $8.03 29%
Open Market OMKT $13.56 12% $1.44 16%
CDnow CDNW $17.81 11% $1.81 -1%
Sportsline USA SPLN $56.00 11% $5.63 260%
N2K NTKI $14.31 10% $1.31 10%
Lycos LCOS $105.50 10% $9.25 90%
ISS Group ISSX $84.13 10% $7.38 53%
USWeb USWB $42.06 9% $3.38 59%
Mindspring MSPG $98.44 7% $6.81 61%
Infoseek SEEK $80.88 7% $5.56 64%
Xoom.com XMCM $63.75 6% $3.50 93%
Egghead.com EGGS $15.75 5% $0.75 -24%
CheckPoint Software CHKPF $43.06 5% $1.94 -6%
Yahoo! YHOO $174.88 5% $7.56 48%
Beyond.com BYND $24.38 4% $0.88 17%
GeoCities GCTY $112.38 4% $4.00 234%
Amazon.Com AMZN $133.81 3% $3.88 25%
24/7 Media TFSM $28.00 2% $0.63 0%
Broadcom BRCM $63.38 2% $1.38 5%
Inktomi INKT $75.50 2% $1.63 17%
Security First Technologies SONE $68.50 2% $1.25 125%
VocalTec VOCLF $11.25 2% $0.19 0%
Cisco CSCO $106.00 1% $0.69 14%
Broadcast.com BCST $90.50 1% $0.50 137%
Verisign VRSN $124.50 1% $0.69 111%
Onsale ONSL $39.38 -2% -$0.63 -2%
Preview Travel PTVL $22.63 -2% -$0.38 23%
Concentric CNCX $58.69 -2% -$1.31 77%
@Home Network ATHM $119.50 -2% -$3.00 61%
Axent AXNT $33.63 -4% -$1.25 10%
eBay EBAY $157.81 -5% -$8.44 96%
Excite XCIT $107.00 -6% -$6.25 154%
CMG Info CMGI $180.75 -7% -$13.69 239%
Security Dynamics SDTI $16.50 -7% -$1.31 -28%
Network Associates NETA $42.19 -12% -$6.00 -36%
CNET CNET $96.94 -13% -$14.25 276%

Note CNET (NASDAQ:CNET) coming in at dead last in the ISDEX this week, down 13%. It ran all year on deal fervor and expectations of an NBC taking it to the altar of never-ending media bliss. Up 276% for 1999 makes up for the week's softness I believe.

Other news and moves:

  • 99.03.16 - USWeb (NASDAQ:USWB) gets a initial "buy" from Soundview. I think the Web marketing solutions company holds great potential for outsourcing Web presences for corporations. The integration of CKS adds the personal touch to the marketing effort. USWB closes up 6.5% to $42.0625 per share.

  • 99.03.15 - Sportsline (NASDAQ:SPLN) plans to sell $150 million convertible subordinated notes. I see the move indicative of the new capital requirements to compete on a global level for any Internet company that wants to grab a broad category. It's getting more expensive. The offering comes on the heels of Sportsline's announcement that its page views hit an all-time record over this past NCAA basketball weekend: 65 million page views, up 72% vs. last year.

  • 99.03.12 - CMGI (NASDAQ:CMGI) shares fall 10% today to $164 on profit taking. The company reported earnings yesterday of $14.1 million, $0.30 EPS from the sale of Lycos, Amazon and GeoCities shares, for its fiscal second quarter ending January 31, 1999. excluding those gains losses are $0.40 per share, almost double the consensus of First Call. The Internet venture and operating firm said in its conference call CMGI indicated it wasn't looking at splitting its shares, which it just did in January.

  • 99.03.11 - Infospace.com (NASDAQ:INSP), which had a phenomenal run yesterday with a 20-plus point gain, drops 11% today as the content and commerce wholesaler files a follow-on 2.8 million offering. I see the cash it could raise as necessary for the hypergrowth in the segment. Dilution of shares will happen, but the net gain could be on the plus side as scale turns into top and bottom line over time.

  • 99.03.10 - Investors looking for the next big thing seem to be throwing some caution to the wind and buying into that sentiment, rather than doing due diligence. Example: VerticalNet (NASDQ:VERT) soars 32% to $96.25 per share on a "buy" tout from Hambrecht & Quist. But I would caution that while stocks such as VERT, in particular, have a great mission statement--to address various industries with custom Web sites and info--I would like to see more cash on its cash flow statement before supporting its current valuation.


    HotWatch '99 by Steve Harmon offers a monthly insight into the hottest stocks in the Internet, his top picks for 1999. Last year's picks by Steve gained 312%. Each month a new report, delivered to you click here for more info -


    Accolades for Internet Stock Report:

    "Fresh and provocative" -CBS Marketwatch, who named Steve Harmon one of the top Internet stock analysts and only independent one honored

    "I am a huge fan of Steve Harmon's analysis" -Kleiner Perkins' John Doerr