Excite (NASDAQ:XCIT) filed Feb. 24 to sell 3.9 million shares in a
secondary offering that will raise almost $170 million. We think the move
could vault it head-to-head with Yahoo! (NASDAQ:YHOO) in a race for first in
the navigation space.
Yahoo! can also do a secondary and cash up beyond the $100 million it’s
sitting on. Welcome to the new game: whoever has the cash wins or has a
better chance.
That’s because “deep pockets” Microsoft is on the horizon. In the fall, the
company will debut a start page that brings together Expedia, Investor,
CarPoint, etc., with search and directory, and free e-mail (HotMail).
Yet we’ve only just begun to Net, 1% of the world. Just when you thought
the Internet “big idea” race was over, and firms such as Netscape, Yahoo!
and Amazon all landed the prime real estate, the end of the beginning may
change all that. It’s what we call “factor x,” the notion that every new
user on the global computer network becomes a potential producer-commercial
entity-competitor-ally.
You’re always one click away from losing marketshare or gaining it.
Hyperlinks = hyper attention deficit by users. Loyalty is negligible when a
better idea comes along, otherwise we’d all be using Prodigy circa 1987.
Notably, the vertically-focused stocks did the best the past week. TCI,
which owns a chunk of @Home, selected the firm to implement its set top
box, sending shares in the cable Internet service provider zooming.
We think @Home (NASDAQ:ATHM) could very well be the next AOL, only faster
and more media-centric. Give it five years. On the down side, @Home
management ran Silicon Graphics before heading for the ISP. The same
Silicon Graphics that bet big on mainframe computer Cray by acquiring it
just as low-end PCs began to eat the graphic workstation market.
Trusted Info (NASDAQ:TISX) ran on a buyout from Network Associates
(NASDAQ:NETA), and we expect more deals in the Web security space soon as
firms merge to compete. A lot of separate components need to be brought
together in a suite of offerings.
The new winners on top are focused players–we expect more of that as the
Internet gets too big for any one firm to dominate. It’s like trying to
dominate the gross national product at some point.
ISDEX Feb. 17 – 24
ISDEX ® | Ticker | 24-Feb-98 | % change | Point change | % change |
Internet Stock Index | symbol | close | from | from | from |
17-Feb-98 | 17-Feb-98 | 31-Dec-97 | |||
ISDEX Geometric Average | 130.12 | 4.7% | 5.90 | 30.3% | |
ISDEX Price Wtd. Composite | 986.72 | 3.6% | 34.64 | 24.9% | |
NASDAQ | 1,738.71 | 2.1% | 35.28 | 10.7% | |
DJIA | 8,370.10 | -0.3% | -28.40 | 5.8% | |
Trusted Information Systems | TISX | $ 20.13 | 82% | $9.06 | 101% |
@Home Network | ATHM | $ 36.31 | 31% | $8.56 | 45% |
Spyglass | SPYG | $ 8.41 | 24% | $1.61 | 70% |
CNET | CNWK | $ 37.88 | 23% | $7.13 | 28% |
Sportsline USA | SPLN | $ 22.75 | 21% | $3.94 | 112% |
Open Text | OTEXF | $ 16.38 | 18% | $2.50 | 22% |
Earthlink Network | ELNK | $ 51.50 | 16% | $7.13 | 100% |
VocalTec | VOCLF | $ 21.00 | 12% | $2.19 | 2% |
Infoseek | SEEK | $ 14.75 | 9% | $1.22 | 37% |
USWeb | USWB | $ 18.00 | 8% | $1.31 | 92% |
America Online | AOL | $ 119.06 | 6% | $7.06 | 32% |
Open Market | OMKT | $ 15.88 | 6% | $0.88 | 65% |
Amazon.Com | AMZN | $ 64.88 | 5% | $3.13 | 8% |
Mecklermedia | MECK | $ 28.38 | 4% | $1.00 | 14% |
CheckPoint Software | CHKPF | $ 41.75 | 2% | $0.63 | 2% |
CMG Info | CMGI | $ 41.63 | 1% | $0.25 | 38% |
Mindspring | MSPG | $ 48.00 | 0% | $0.13 | 43% |
Security Dynamics | SDTI | $ 33.81 | 0% | $0.06 | -5% |
E*TRADE | EGRP | $ 25.69 | -1% | -$0.31 | 12% |
CyberCash | CYCH | $ 12.38 | -2% | -$0.25 | -2% |
CKS Group | CKSG | $ 18.00 | -3% | -$0.56 | 27% |
Network Solutions | NSOL | $ 19.88 | -3% | -$0.63 | 51% |
Security First Net Bank | SFNB | $ 10.56 | -3% | -$0.38 | 46% |
Versant Object Technologies | VSNT | $ 7.94 | -4% | -$0.31 | -43% |
Onsale | ONSL | $ 25.06 | -4% | -$1.00 | 39% |
Yahoo! | YHOO | $ 61.53 | -4% | -$2.72 | -11% |
Concentric | CNCX | $ 13.88 | -4% | -$0.63 | 56% |
Netscape | NSCP | $ 20.00 | -5% | -$1.06 | -18% |
Forefront | FFGI | $ 9.94 | -6% | -$0.63 | 27% |
RealNetworks | RNWK | $ 14.94 | -7% | -$1.13 | 8% |
N2K | NTKI | $ 24.00 | -8% | -$2.13 | 64% |
Excite | XCIT | $ 39.63 | -9% | -$4.13 | 32% |
PSINet | PSIX | $ 7.56 | -11% | -$0.94 | 48% |
Lycos | LCOS | $ 35.28 | -15% | -$6.34 | -15% |
TOTAL | 951.44 | 4.5% | 40.98 | 24.9% | |
SIMPLE AVERAGE | 28.83 | 4.5% | 1.24 | 24.9% |
Feb 24: Lycos (NASDAQ:LCOS) signs a three-year agreement with magazine
subscription firm The Electronic Newsstand which will pay the search and
navigation firm $10.5 million over three years to promote its services on
Lycos’ Network. Another example in the developing world of goods and services
paying for distribution at the Web networks.
Feb 23: Trusted Information Systems (NASDAQ:TISX) agrees to be acquired for
$300 million stock or 0.323 shares from Network Associates (NASDAQ:NETA).
The $20.188 per share offer is a 60% premium to the price of Trusted
Information shares, which closed at $12.625 Friday. We predicted
consolidation here and think more may come. See ISR, October
10, 1997.
Feb 20: DoubleClick (NASDAQ:DCLK) goes public at $17 per share and surges
more than 70% before backing off and closing up more than 50% on its first
day of trading at $26.75 per share. Shares price above range with more
shares offered, 3.5 million. The $60 million proceeds should help this
Web-ad pioneer push forward. DCLK originally sought to sell 2.3 million
shares at $13.
Feb 19: WorldCom highlights its Internet division (which is the formerly
publicly-traded UUNET) revenue at $102 million for fourth quarter, up 101%.
Full-year Internet revenue reaches $566 million, up 124%. With MCI, we think
the Internet percentages here could take off beyond the impressive results
so far.
Feb 18: N2K (NASDAQ:NTKI), which sells music via the Web, posts 1997
revenues of $11.3 million vs. $1.7 million for 1996. Net losses for 1997
reach $28.7 million or $5.88 per share vs. net losses of $19 million or
$6.85 per share for 1996. Fourth quarter ended December 31, 1997, is $4.8
million vs. $679K 4Q96 with net loss of $13.2 million, or $1.26 per share,
vs. a net loss of $6.5 million or $2.21 per share 4Q96. In the $15 billion
music industry this is still a rounding error. Yet we think 5% of music
could be sold via the Web within two years. $1.5 billion up for grabs.
