If you happen to see someone by the nickname “Slick Willie” chatting on AOL’s
romance connection, then perhaps President Clinton’s State of The Union
Address may make sense. Caught up in a web of rumors it was Clinton’s
endorsement of the “Internet” in every home (as opposed to a chicken in
every pot) that caught our attention.
Personal lambada aside, Clinton’s remarks about the Internet’s profound
affect on U.S. living are not something to be missed on Wall Street.
Whether or not the Administration has any real impact or bearing on the
Internet actually getting in every home is debatable. Congress shall make
no tax might be a good step.
Perhaps the biggest advancement government can do would be to actually wire
classrooms across the nation, not just talk about it. The Internet turns on
the world as library. The logic flows thusly: If kids use the Internet
they’ll likely grow up and keep using it.
Translation, ubiquity. That could fuel strong growth for companies such as
these:
State Of The Net, January 13-27
ISDEX ® | Ticker | 27-Jan-98 | % change | Point change | % change |
Internet Stock Index | symbol | close | from | from | from |
13-Jan-98 | 13-Jan-98 | 31-Dec-97 | |||
ISDEX Geometric Average | 104.31 | 4.4% | 4.39 | 4.4% | |
ISDEX Price Wtd. Composite | 831.28 | 2.8% | 22.66 | 1.8% | |
NASDAQ | 1,578.90 | 2.4% | 37.27 | 0.5% | |
DJIA | 7,815.01 | 1.1% | 82.88 | -1.2% | |
Onsale | ONSL | $ 24.81 | 41% | $7.19 | 38% |
Versant Object Technologies | VSNT | $ 6.44 | 26% | $1.31 | -53% |
PSINet | PSIX | $ 7.19 | 21% | $1.25 | 40% |
CNET | CNWK | $ 31.00 | 19% | $5.00 | 5% |
Sportsline USA | SPLN | $ 21.19 | 19% | $3.31 | 97% |
USWeb | USWB | $ 11.94 | 16% | $1.63 | 27% |
Excite | XCIT | $ 38.09 | 15% | $4.91 | 27% |
Mecklermedia | MECK | $ 27.25 | 13% | $3.13 | 10% |
Infoseek | SEEK | $ 12.03 | 13% | $1.34 | 12% |
Forefront | FFGI | $ 9.00 | 13% | $1.00 | 15% |
Mindspring | MSPG | $ 32.81 | 11% | $3.25 | -2% |
CMG Info | CMGI | $ 33.13 | 11% | $3.19 | 10% |
Network Solutions | NSOL | $ 19.81 | 9% | $1.69 | 51% |
Earthlink Network | ELNK | $ 30.88 | 8% | $2.38 | 20% |
Security First Net Bank | SFNB | $ 7.38 | 7% | $0.50 | 2% |
Lycos | LCOS | $ 38.47 | 6% | $2.09 | -7% |
Concentric | CNCX | $ 9.91 | 4% | $0.41 | 12% |
Open Text | OTEXF | $ 11.88 | 3% | $0.38 | -11% |
America Online | AOL | $ 91.31 | 2% | $2.06 | 1% |
Amazon.Com | AMZN | $ 57.00 | 2% | $1.25 | -5% |
N2K | NTKI | $ 24.00 | 2% | $0.38 | 64% |
RealNetworks | RNWK | $ 16.63 | 2% | $0.25 | 20% |
Raptor | RAPT | $ 12.00 | -1% | -$0.13 | -9% |
Trusted Information Systems | TISX | $ 10.13 | -1% | -$0.13 | 1% |
Spyglass | SPYG | $ 5.38 | -2% | -$0.13 | 9% |
CKS Group | CKSG | $ 14.00 | -3% | -$0.38 | -1% |
Open Market | OMKT | $ 10.25 | -4% | -$0.38 | 6% |
VocalTec | VOCLF | $ 19.00 | -4% | -$0.75 | -7% |
CyberCash | CYCH | $ 11.00 | -4% | -$0.50 | -13% |
@Home Network | ATHM | $ 23.31 | -7% | -$1.63 | -7% |
Yahoo! | YHOO | $ 60.06 | -9% | -$5.72 | -13% |
Netscape | NSCP | $ 16.88 | -11% | -$2.19 | -31% |
E*TRADE | EGRP | $ 19.91 | -13% | -$2.94 | -13% |
CheckPoint Software | CHKPF | $ 34.75 | -13% | -$5.25 | -15% |
Security Dynamics | SDTI | $ 32.50 | -14% | -$5.13 | -9% |
TOTAL | 831.28 | 2.8% | 22.66 | 1.8% | |
SIMPLE AVERAGE | 23.75 | 2.8% | 0.65 | 1.8% |
January 27: Netscape (NASDAQ:NSCP) 1997 revenue grows 54% to $533.9 million
(10x what Yahoo! or most other Internet firms posted). Yes, it’s a
different animal, but the revenue still impresses for a three-year old
company.
Losses are worse than expected, $115.5 million. But without nonrecurring
charges net income would have been $4.7 million, or $0.05 per share. Still
not as good as
1996 in the earnings department, however–1998 may be the year Netscape
flies or dies as we know it. Big changes ahead.
January 26: Security Dynamics (NASDAQ:SDTI) revenue for 1997 jumps 62% to
$135.9 million, while net income, not including nonrecurring items,
increases 79% to $23.0 million ($0.58 per share on a diluted basis).
Nonrecurring expenses included $7.4 million from merger acquisition costs
and purchased technology. The sale of marketable securities offsets charges
somewhat and brings net income to
$15.6 million ($0.39 per share on a diluted basis).
January 23: Infoseek (NASDAQ:SEEK) seeks capital, plans to sell 2.5 million to
3 million shares of common to be used for general corporate purposes,
capital expenditures, and working capital.
Infoseek posts $34.6 million revenue for 1997, up 129%. Fourth quarter
revenue is $12.5 million, a 105% increase while net loss reaches $24.6
million, $0.93 per share annual net loss, 4Q net loss of $4.1 million,
$0.15 per share.
CheckPoint Software (NASDAQ:CHKPF) exceeds analyst expectations with
$82.9 million 1997 revenue vs. $31.9 million for 1996. Net income is $40.2
million for the year or $1.23 per share vs. $15.2 million or $0.29 per
share in 1996. Fully diluted earnings per share are $1.07 for 1997 and
$0.43 for 1996.
January 22: Netscape (NASDAQ:NSCP) decides to give away its browser and goes a
step further by putting the source code on the Web for programmers to use
and create new features for it. See ISR
January 6 for our timely call to make the browser client free.
January 21: USWeb (NASDAQ:USWB) reports $10.6 million sales on $19 million
loss
for fourth quarter. Full year results reach $19.3 million sales and $53.3
million loss. USWeb says includes $11.1 million unusual charge for 4Q and
$29.6 million for full year. We still think it’s early in the turnkey Web
solution game and that USWeb may have a lot longer to go to reach critical
awareness.
@Home (NASDAQ:ATHM) reports 4Q sales of $3.7 million vs. $535k 4Q96.
Full-year sales are $7.4 million vs. $676k. Losses hit $184.4 million for
4Q and $219.1 million
for 1997. Looks like a lot of bleeding here but most of this relates to an
agreement with Cablevision for distribution. $172.6 million worth.
January 20: AOL (NYSE:AOL) reports it 11 millionth subscriber citing strong
sales of sub-$1,000 PCs, which accounted for 40% of all PC sales this
holiday season, as the driver.
Spyglass (NASDAQ:SPYG) posts $4.25 million first-quarter revenue ending
December 31. vs. $3.88 million 1Q96. Of that, service revenues grow to 39%
of all revenue, up from 22% 1Q96. Nesbitt Burns ups SPYG to “buy” from
“neutral” and we think that the device market SPYG’s aimed at may finally
be showing signs of fruition.
January 14: Yahoo! (NASDAQ:YHOO) posts year-end revenue of $67.4 million, up
242% vs. 1996. Fourth-quarter revenue hits $25 million, up 181% vs. 4Q96.
Pro forma net income is $2.6 million or $0.05 per share, excluding $3.9
million charges related to the acquisition of Four11, the directory and
e-mail company. With that charge, net loss is $1.3 million $0.03 per share.
