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Excite expects to gain about 10 million page views a day from the deal. Our snapshot analysis of the numbers: on a $25 CPM and 25% page view sell-through (based on a net 10 million page views a day that Excite expects to gain) that implies $22.5 million a year or $45 million in ad sales over the two-year term of the deal–to Excite.
But we believe that Excite can do better with marketing deals and targeted CPMs, delivering the right ad to the right user at the right time for better CPM (thanks to its MatchLogic buy).
And the gain it will have as a brand could be worth more than $50 million alone in a space that depends on brand more than anything else to differentiate. In short, XCIT seems to be oversold today while Wall Street applauded NSCP, who we think didn’t gain as much from the deal other than cash to build its Web site. To us Excite appears to be the real winner. The real loser? Infoseek (NASDAQ:SEEK). Check our stats on which search and navigation service benefited the most from Netscape’s search button link: (company, percent overall traffic from Netscape) — Yahoo!, 10%; Excite, 11%; Lycos, 10%; Infoseek, 26%.