ASX Net Stock Weekly Wrap

With the benchmark Australian All
Ordinaries index hovering around record levels and the
US’ Nasdaq making another run at 5000, Australia’s big
Internet plays finished the week on a high. The week
past saw Australia’s biggest technology sector deal
and a lot of US driven volatility in the Internet
space.

Deal of the week obviously goes to the Solution
6/Sausage Software merger. However, the big winner out
of the merger does not appear to be the new look Solution 6 (SOH).
Telstra Corp.
(TLS) emerged from Monday’s deal with control of
Australia’s biggest listed Internet play. Solution 6
CEO Chris Tyler should also be grinning, he retained
the right to acquire 10% of Solution 6 (although the
exercise price for most of his options is now around
$10).

Stock in Solution 6 finished the week at $12.27 up
almost $2 from it week open of $10.30. Sausage Software
(SAS) finished at $6.84, coming off a high of $8.20
but still well up on its week open of $6. Telstra
Corp. finished the week flat at $7.74 despite the
positive effect the merger is expected to have on
Telstra’s Internet businesses.

Analysts blamed a report in the influential Barrons for Internet
losses on Tuesday. The report entitled “Burning Fast,”
listed 51 public US Internet companies it claimed will
burn through their cash reserves within 12 months. The
Nasdaq dropped more than 3.9% in one day after Barrons
hit the news stands.

Homegrown portal Looksmart(LOK)
clawed back some of its losses to finish the week on a
high after announcing a deals with Go2Net,
carsmart.com, creditland.com and eCoverage.com in the
US. Looksmart was hit hard by the US sell down of
Internet plays early in the week but recovered from an
intra-week low of $3.58 to close Friday at $3.93.

Australia’s junior mining stocks continue to
dominate the more speculative end of the Internet
market. Pilbara Mines closed the week $1.33 higher
than its $3.27 open at $4.60. Rumors regarding the
stock continue to fly – but it appears that all the
hype is about Pilbara’s investment in Request DSL, the
aspiring broadband provider that is yet to is yet to
get its telecommunications license. Request has
enlisted the world’s second biggest company, Cisco
Systems, to assist in the roll out of Request’s
Asymmetric Digital Subscriber Line (ADSL) network.