Internet Market Close Report for 1998.09.28



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Moves and news:

  • RealNetworks (NASDAQ:RNWK) signs a deal with AOL (NYSE:AOL) to bundle its streaming media player on AOL 4.0, the new software upgrade for AOL users. At about 14 million global users the deal could prove significant over time. Microsoft (NASDAQ:MSFT) chairman Bill Gates is probably on the phone now to AOL’s Steve Case, though, to try and get its Media Player in the mix.

    The Real-AOL deal wasn’t announced as “exclusive” but we think Real has enough leverage and dominant market share to stave off an argument from Microsoft that its Media Player (built in part under a license using Real’s technology) is somehow a more complete solution. RNWK shares jump 23% to $41.25 per share today. Even before the AOL deal we considered RNWK a core multimedia Internet holding, more so than (NASDAQ:BCST).

    Related news: AOL
    finally accounted for its two recent acquisitions for its June quarter (4Q) results. With charges AOL reports $7.1 million, $0.03 cents per fully diluted share EPS vs. $11.8 million net loss, $0.06 loss per share for 4Q last fiscal year.

  • Mindspring (NASDAQ:MSPG) continues to buy growth as it agrees to acquire ExecNet of White Plains, New York, a subsidiary of Cyllon Systems International, Ltd. Undisclosed terms. With more than 4,000 ISPs in the U.S. a lot of consolidation can take place yet oddly few do so. It reminds us of the early days of cable when mom and pop operators ruled. Eventually many sold out. That may happen with ISPs or it may not. Many enjoy being part of the local business environment and may not see a national ISP as adding any value to them.

  • Intel (NASDAQ:INTC) and Netscape (NASDAQ:NSCP) may invest in Red Hat Software, one of the few firms that offers software add-ons for Linux, a freeware operating system beloved by many Internet service providers and gurus. While Linux’ market share is about 1% the move indicates Intel’s desire to embrace multi-platforms in OS. Also, if you take Netscape’s move earlier this year to give away its code to developers with this news, it shows a shift in the industry to embrace the “viral software development” that has long been the hallmark of the Internet. Having developers the world over improving software scales much faster than the most dedicated teams at any one company.

    The superbowl of Internet investment conferences! Internet Investment Symposium ’98 @ Fall Internet World!

    New York City, Oct. 8-9 as Steve Harmon, Upside, CNNfn, PriceWaterhouseCooper, and more talk investments with some of the top names in the industry…top execs of GeoCities, CMG Info, DoubleClick, venture capitalists doing the $ billion deals, debuts hot startups at Startup Live! Sign up now

    LaunchPad Pavilion, part of Fall Internet World ’98, the world’s largest Internet industry trade show held Oct 5 – 9, offers exhibit space for startups ONLY at a reduced price in order to meet their often limited capital available at the startup stage. It is Mecklermedia’s way of letting the newbies get their voice heard. If you or a friend is at a Internet startup and want to exhibit at Fall Internet World (expected attendance is more than 50,000) in New York City’s Javits Center then contact Reed Bocchino 203-341-2826 or email: mailto:[email protected]

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