Radioactive WEBDEX: Top 10 Sites User Value Off 21%

The Moscow-inspired market blast rumbled through the global stock market
and wiped out 21% of the value of the top 10 Web sites, bringing WEBDEX
(Website user valuation index) to an average of $105 per user.


Market fallout radiated more than just white flashes across the Internet
stock landscape; it blipped across the top 10 Web site valuations per user,
leaving them with a 21% drop overall since August 26. The past two trading
sessions brought back 12%, meaning at one point the WEBDEX value per user
average was down more than 30% since last Thursday.


Biggest decliner? Infoseek (NASDAQ:SEEK), trading amazingly close — for
the whole works–to what Disney paid for just 43% of the firm recently
($430 million).


The continued drop for SEEK remains something that
perhaps only those inside the Mouseketeer hangout can explain. Annette
Funicello, where are you when SEEK needs you? Here’s the vapor trail August
26-September 2:














































































































































Mecklermedia’s

July

Aug 26

Sept 2

Aug 26

Sept 2

Percent

WEBDEX

Users

Market cap
or PMV*

Market cap
or PMV*

User

User

change

(millions)

(millions)

(millions)

Value

Value

Yahoo

26.6

$9,076

$7,284

$341

$274

-19.7%

AOL.com*

22.0

$3,200

$2,500

$145

$113

-21.9%

Excite

17.3

$2,004

$1,409

$116

$81

-29.7%

Netscape.com*

17.6

$2,000

$1,600

$113

$91

-20.0%

Microsoft.com*

18.6

$2,600

$2,200

$140

$118

-15.4%

MSN.com/Hotmail*

16.3

$1,500

$1,250

$92

$77

-16.7%

GeoCities

14.2

$958

$719

$67

$50

-25.0%

Lycos

14.5

$1,408

$966

$97

$67

-31.4%

Infoseek

12.2

$816

$594

$67

$49

-27.2%

Disney.com*

9.7

$1,400

$1,200

$145

$124

-14.3%

TOTAL

169.0

$24,962

$19,721

$1,324

$1,045

-21.1%

AVERAGE

16.9

$2,496

$1,972

$132

$104

-21.1%

User tallies per www.rkinc.com *PMV
= private market valuation estimate for Web asset only based on
financials, reach, users,
brand value, peers, mergers and acquisitions, marketplace 

(c)
1998 Mecklermedia, Internet.com (NASDAQ:MECK)





SEEK value per user trades in line with the good-neighbor folks at
Geocities (NASDAQ:GCTY), which holds potential as one of the more popular
consumer places to hang out a welcome mat or shingle. Affinity holds more
promise than meets the eye.


Here’s another look at valuation from
another angle, discounting ahead some of the revenue for the group. On a
revenue multiple basis, we ran our 1999 estimated top line results for the
above companies and came up with an average 14x forward (as in 1999)
revenue multiple.


AOL in its latest quarter generated 16% of revenue
from non-access, some of which was from AOL.com, although it’s not broken
out. We think AOL.com could start to post more significant percentages with
revenue for 1999 (calendar) approaching $250 million. If so, that implies a
10x forward multiple for our valuation of AOL.com.


YHOO tops the list at about 28x estimated forward revenue, GCTY estimate
may be 24x if it can do business-wise what it’s done Webwise, namely turn
users into revenue. Meanwhile, NSCP (Netcenter) revenue alone could
approach $200 million, though if its growth and features continue, implying
an 8x forward revenue multiple valuation.

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