First reader up send us this from Paris, France:
“Do you think that community based sites such as iVillage will go public
soon? Do you think these stock are a big investment opportunity?”
Reply: iVillage touts itself as the women’s network and claims 73
million monthly page views. The company recently closed $32.5 million in
financing from venture capitalists and others, as well as picked up a few
dollars from Intel.
Anytime a professional investor such as the venture
capitalists get involved they want a liquidity event of some sort, an IPO
is one such moment. Another could be sale to a larger company.
Is
iVillage IPOable? depends on revenue and users. 73 million page views puts
it in a fairly strong number on that metric. If the stock market stays
receptive to Internet offerings I would anticipate an IPO from iVillage in
1999 or it gets taken out by an AOL, Yahoo, Excite, Lycos or
Disney/Infoseek.
Say What?
“Can you elaborate on what some of these valuation guides mean such as
private market valuation , user value when evaluating a web site?
Reply: Private market valuation refers to what an asset/Web site
could fetch at auction among competing bidders. User value refers to the
value of the asset divided by the number of unique monthly users, or what I
invented called Internet.com’s WEBDEX. Each week WEBDEX shows the value per
user for the top 10 Web sites, usually Thursdays. See Archives for examples.
ETRADE & ISDEX?
“I would like a ISDEX mutual fund. Try etrade.com”
Reply: If ETRADE would like to talk we’re all ears. More than 223
people have voted to make ISDEX a mutual fund in the three weeks we’ve had
the voting link up. ETRADE, Vanguard, are you listening?
Bluefly
“Bluefly has gone up incredibly in past week from 3-21…could you look
at it…huge volume of 5x avg daily volume too..they sell designer clothes
on the Net..pacts with aol, lycos, athm..etc”
Reply: To really fulfill its potential we think Bluefly may need
capital. Bluefly (NASDAQ:BFLY) just opened its Web site September 9, so the
results yet are too soon to tell. For the one-month of operating its
apparel store on the Web it reports sales of $6,700 in gross revenues from
96 orders with an average order size of $72.
BFLY blipped across the
radar from its previously nowhere status after the news it signed deals
with Yahoo, Lycos, @home and others. Bluefly has only 2.7 million shares
outstanding and a market cap of $36 million on zero revenues to speak of.
BFLY shares have soared as high as $24.50 and as fallen as low as $1.50
per share the past 52 weeks. While the marketing alliances look impressive
at first glance we think Bluefly needs to market itself, and that means
spending.
Netscape History
“Steve, I agree with your statement (that) blames Netscape’s focus on
killing Microsoft for overlooking where the real opportunities lay. In
retrospect I believe that Netscape’s biggest error was bringing in an
Internet outsider to head them up. It made Wall Street happy, but Internet
companies need vision and understanding first. Marc Andreessen is not given
enough credit. His vision started this wild ride for all of us.
Reply: Sometimes hindsight is 20/20 and sometimes hindsight is
realizing that Netscape did the best it could do. Many Internet companies
blend experienced management with youthful vigor. The more I think about it
the more what Netscape did looks like an incredible feat: took on Microsoft
and change the software landscape forever.
I also agree that Andreessen
should be given more credit for Netscape’s rise. Marc reads this report so
your comments won’t go unnoticed.
Yahoo-Excite Differences
“I believe it’s time to unmask the differences between Yahoo and Excite. As
it’s clear from analysis of sales multiples and growth rate, the two companies
are quite similar only Excite is lagging behind at about 83% of last Q
sales (44 vs 53) of Yahoo or if you look at it differently – several weeks.
On the other hand, Excite seems to have a faster growth rate in revenues.
Now, valuation is VERY different. It’s true that Excite is losing money,
but a closer look shows that it is due in large part to fixed costs which
should be less meaningful when sales soar. So, what is the catch?”
Reply: If you want me to play Zorro, Zorro I’ll be: Yahoo has
three times as many page views per day than Excite, about 150 million to
Excite’s 50 million. That inventory represents future sales and earnings
growth, each page a revenue-generator from ads, e-tail and commerce. Also,
there’s always a premium to the number one firm in any arena: Coke vs.
Pepsi; Wal-Mart vs. KMart; Microsoft vs. Oracle.
Bidding Hello
“Steve, what do you think about Bid.com (Toronto:BII.TO)?”
Reply: It’s difficult to keep track of Canadian stocks,
financials and key info for stocks like these and unfortunately that may
hurt its valuation and profile on Wall Street. The auction space is crowded
with eBay (NASDAQ:EBAY), Onsale (NASDAQ:ONSL), Egghead.com (NASDAQ:EGGS),
and now new IPO uBid (NASDAQ:UBID). I foresee auctions being very common
across multiple Web sites, a feature more than anything.
moment of 1998, either personally for you or for the industry as a whole –
results published here shortly please
click and tell us your pick.
Attention Internet Startups! LaunchPad West StartUp
Pavilion, part of Spring Internet World ’99, one of the world’s
largest Internet industry trade shows offers exhibit space for startups
ONLY at a reduced price in order to meet their often limited capital
available at the startup stage. Contact Sean Moriarty (hurry, space
limited): mailto:moriarty@mecklermedia.com
