Digital Island Soars As Investors Flock to Net Stocks

Shares of Digital Island were soaring in midday trading Wednesday following the announcement of an alliance with Sun Microsystems while Yahoo! Inc. was giving back some of Tuesday’s huge gains on its first day as a member of the S&P 500 index.

It was also a good day for NetRatings Inc., an Internet audience measuring firm, which debuted late Wednesday morning on the Nasdaq.

Just after noon Eastern,’s Internet Stock Index had climbed 11.06, or 1.39 percent, to 804.73, the Nasdaq Composite had climbed 29.06 to 3,615.98 and the Dow Jones industrial average was up 19.27 to 11,125.92.

Digital Island Inc. (ISLD) had soared 51-3/4 to 121-1/8 after Sun Microsystems Inc. (SUNW) announced it was taking a minority stake in the networking company.

Inktomi Corp. (INKT) was up 11-3/16 to 174-7/8. The company increased its stake in Digital Island and said it was spending up to $150 million on Sun servers.

Volpe Brown Whelan Wednesday raised its price target on Inktomi to $195 from $150.

Entrust Technologies Inc. (ENTU) jumped 7-5/8 to 60-13/16. The Internet security software maker signed a deal with Digital Medical Systems Corp. to build a Web-based security Network for a number of Digital’s hospital and clinic customers. Inc. (GOTO) gained 10-5/8 to 97-5/16. The search engine signed a one-year deal with MindSpring Enterprises Inc. (MSPG) to make’s service its default search provider. Inc. (AMZN) was up 4-9/16 to 90-5/8. The Internet retailer signed a deal with Sprint PCS (PCS) which will allow mobile phone users to shop at Amazon using their mobile phones.

Also, ING Barings initiated coverage of Amazon with a “strong buy” rating.

Exodus Communications Inc. (EXDS) had jumped 22-1/4 to 166-3/4. The Web hosting company was rated a “near-term buy” by Merrill Lynch’s Henry Blodget who initiated coverage Wednesday. Inc. (EFAX) had jumped 2-7/32 to 9-1/8. The company, which allows customers to receive faxes through e-mail, is partnering with Microsoft Corp. (MSFT) and will receive promotion on several Microsoft properties.

Finally, NetRatings Inc. (NTRT) had soared 12 to 29 shortly after debuting. The company sold 4 million shares at $17. Lehman Brothers was the lead underwriter.

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