eMailbag: Readers Ask When Inktomi Will Go Public

First reader up this week asks:


“What is the ticker symbol for Inktomi? Will you give us a heads up when it
goes public or can you get on the wagon now?”


Reply: We had a lot of readers asking about Inktomi and when it
would go public. Remember, Inktomi just filed the S-1, the initial document
that says it intends to go public, sell stock. It can file addendum to
that. Once it’s happy with the offering, and if market conditions are
favorable, the underwriters file a “red herring,” a thinner, easier to read
document.


After that comes the prospectus, the final pre-public document which is
very similar to the red herring. It’s usually between 30-45 days after the
S-1 that a firm goes public. But the wording says “as soon as practicable”
on these and they are timed to go when the market seems best.


Inktomi’s proposed ticker symbol is INKT. We’ll keep an
eye out for it. Another good site for initial public offering information
is ipomaven.com. Tell them we sent you!


New to the Game


“I am late getting into this Internet investing, but last night I did some
research on your past columns and their effect on stock price and volume.
You just might be the most influential person on a stock on or off Wall
Street right now.”


Reply: Our goal is to look closely, try and grasp the investment
landscape situation, run the numbers and scenarios and let people make up
their own minds. The target from day one was to keep the analysis worthy of
your readership. We don’t worry about prices, volumes and daily blips–our
focus is on value and doing our best for readers.


And that means everyone including the high-profile movers and shakers we
list below: Microsoft’s Bill Gates, Kleiner Perkins’ John Doerr, EDVenture
Holdings’ Esther Dyson, and you.


Some 40,000 people read the Internet Stock Report and the Internet Stock
Index (ISDEX) daily via the Internet; another 275,000 read it in print in
Internet World and Upside. But this is not a number’s
game, Mecklermedia’s focus is quality and we thank you for your support.
See This


“InterVu should be added to the Internet Stock Index. The stock symbol is
ITVU. It looks like an up and comer. Could you please give an opinion?”


Reply: We think InterVU’s video over the Internet products are great
but revenues were thin last quarter and in 1997. Net revenues totaled
$59,400 for the fourth quarter and $143,500 for the year ended December 31,
1997, while net loss for 1997 reached $5.3 million vs. net loss of $2.3
million in 1996. See its V-Banner (video in ad banner) offering for a
glimpse at the future of ad banners–forget static text. But how much can
this be protected?


PSI Time?


“My pick is PSIX, a real company with real revenues, no pipe dream here. I
think it’s the best Net play.”


Reply: PSINet (NASDAQ:PSIX) had a pretty good run this year, up more
than 180%. We’re waiting to see if telcos come calling. If so, it’s long
overdue in our opinion.


The trouble is the larger telcos either have their own networks or believe
they have networks that are good enough. What they don’t realize is that
they believe they’re in the voice business and not data. Data will surpass
and dwarf voice in the future. Voice, in fact, will be “packetized” and
turned into data just like your e-mail or Web pages.


Private Market Value


“Because of the “default” aspect of Netcenter on the large installed base
of Netscape browsers, there will be a great amount of “natural” traffic
flow to Netcenter (the time flashing on most VCRs is still 12:00). But is
this as valuable as the “active” choice of a Websearcher going to Yahoo!,
Excite, Infoseek, etc.?


It seems quite difficult to place a PMV on this quasi-unique aspect of
NSCP, and just as difficult to derive such value by subtracting the
emerging enterprise software business value from the total value of NSCP.


As a result of this PMV “valuation” of Netcenter, NSCP looks “cheap”
relative to some of the others in your table, or all the others just vastly
“overvalued”?


Reply: The estimated private market value of something like Netscape
(NASDAQ:NSCP) Netcenter has to do with several factors including peer
valuation, brand recognition, users, registered users, distribution, market
share, mind share, and the ability of the firm to buildout a media company
around this Web site.


We believe as long as users find it rewarding then the value should be in
line with other popular Web destinations and navigation sites.


We would disagree that the “default” nature only attracts users. If that
was the only driver for Netcenter then its numbers probably would be
falling rather than climbing as they are. Being default gets users in the
first time, what’s offered gets them coming back.


In a bidding situation, if one arose, Netcenter could be sold at any price.
Do we believe in an intrinsic value of something like this? We firmly
believe that a company’s Web site–any company–is the most valuable asset
it has or will have. This is the view of the firm for the world. And all
the goods and services that can flow through that portal are endless.

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