One Year Later – Inktomi, NetGravity And Beyond.com

A year ago this month three Internet companies with vastly different
business models went public. Today shares of all three are trading well
above their respective first-day closing price, with one company in
particular emerging as a favorite among investors and analysts.

In order of IPO date, here’s a look at how each member of the Class of
June 1998 has fared:

Inktomi Corp. was best-known for its search engine technology at the time of
its June 10 initial public offering last year, but even back then the
San Mateo, Calif.-based company was betting a large part of its future
on its solution to the bandwidth constraints faced by ISPs and large
corporate networks.

The company’s cluster-technology based Traffic Server has attracted
customers such as America Online and Digex, while helping Inktomi
increase revenues to $14.6 million in the quarter ended March 31, a 323 percent
increase over the year-ago quarterly sales of $3.5 million. Meanwhile,
the quarterly net loss fell from $4.8 million a year ago to $4.6
million.

That latest earnings statement, released two months ago, enabled Inktomi
to beat analysts’ estimates for the third consecutive quarter.

Investors also have noticed Inktomi’s strong positioning in the caching
and search engine markets, as well as its expansion into Shopping Engine
software for portals and its recently announced directory-generation
technology.

After an impressive debut, Inktomi (INKT) shares closed at $36 on the
first day of trading, a 100% gain over the $18 offer price – the stock
climbed above $50 in November and surged above $100 in April. While it
has come down from a high of $159.13 on April 12, Inktomi still has
plenty of altitude, trading early Thursday afternoon at $115.

Online advertising and direct marketing software seller NetGravity Inc.,
also based in San Mateo, barely closed above its $9 offer price on June
12, 1998, finishing the day at $9.75. As of Thursday afternoon, (NETG)
shares were selling at $19.25 — almost twice that price.

In between then and now, however, NetGravity missed much of the wild
run-up experienced by many other Internet stocks. A steep price rise
begun in mid-March pulled NETG shares as high as $66.88 on April 12. By
May 25, though it fell below $20 a share once more.

The quick descent was triggered by a first-quarter earnings report in
mid-April that showed only a 10% growth in revenues over Q4 ’98, though
more than twice the revenues reported in Q1 ’98. Net loss also increased
in Q1 to $3.75 million from $2.8 million a year earlier.

When online retailer Beyond.com Corp. went public last June 17, it was known
as software.net and traded under the symbol SWNT. The company’s initial
offering was for 5 million shares at $9 each, and the first-day close of
$13.25 showed a 47% gain.

Beyond.com, based in Sunnyvale, Calif., was trading early Thursday
afternoon at $21.88. Save for a couple of brief spikes and a recent mild
dip, shares have been selling between $20 and $30 a share since early
December.

The company’s first name accurately described what it did then and what
it still does – sell off-the-shelf software via the Internet to
consumers, businesses and government agencies.

(BYND) shares got a 35% bump on June 4 when it won a software contract
with the Internal Revenue Service.

A few weeks earlier the stock rose on news of lower-than-expected losses and higher-than-expected revenues inthe first quarter.

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