Return Of The Web IPO: Wall Street Candidates Await Market Muse

A long time ago in a stock market far far away Internet IPOs sprouted
like tribbles at a Star Trek convention. After August 31’s haircut, the
filing frenzy subsided. So who’s in the pipeline?

Infospace, Healtheon, eBay,, Xoom have all filed for IPOs and
await the market’s muse before pricing. Many of these are expected to hit
the Street in October/November so long as the market outlook stays
“cautiously optimistic.”

The leading market indicator, ISDEX, The Internet Stock Index, bellwether
shows some signs of recovery after the heavy ‘G’ force it experienced two
weeks ago when Russia called Wall Street on the special hot line and said
“nyet” to the ever-rising bull.

Healtheon, founded by Netscape co-founder Jim Clark, wanted to tap Wall
Street for $75 million. For the six months ending June 30, it’s generated
$20.6 million revenue and a $21.4 million loss. Healtheon was originally to
be called “Healthscape” for those of you who remember. Healtheon’s goal is
to provide a platform, the Internet, for the healthcare industry to share
dataflow between healthcare providers, insurance companies.

In May this year, Healtheon jumpstarted its two-year old effort by
acquiring leading healthcare network provider ActaMed Corporation for 3.1
million shares of common upon IPO. In June Healtheon agreed to acquire
Metis, a provider of Internet/intranet strategic consulting to the
healthcare industry.

Of the IPO amigos shown, both and Xoom focus on the community
space. wants to raise $50 million. It reports 1.7 million
members and 6.1 million unique monthly users. Since its founding, has experienced strong growth. adds about 100,000
new members per month who look at more than 100 million page views.

According to Media Metrix, was ranked as the fourth fastest
growing Web site in terms of audience reach for the first half of 1998.
Revenue: six months ending June 30 totaled $1.1 million with $5.8 million
net loss.

Xoom, meanwhile, wants to raise $46 million via IPO and is the
second-fastest growing Web site this year according to Media Metrix, with 3
million “members” (a member is someone in its e-mail database and/or Web
site builder). It adds 20,000 more a day.

Xoom’s tack has been to offer chat, home pages, e-mail, and other free
services and sell the tools and picks to build out the Web site. Direct
marketing-sales generate revenue. Through June, 1998, 72% of the Xoom’s
$2.8 million net revenue was derived from electronic commerce and
approximately 36% of net revenue was derived from non-U.S. sales. Ad sales
made up $406,000.

Infospace aims to raise $57.5 million with its IPO. Infospace brings
together more than 75 content sources for distribution of its affiliates
sites and outlets, including Internet portals, destination sites and
suppliers of PCs and other Internet access devices, such as cellular
phones, pagers, screen phones, television set-top boxes, online kiosks and
personal digital assistants.

The Web directory-content aggregator posted $2.9 million revenues through
June 30 and a $4.5 million net loss. Infospace’s revenue comes mostly from
a handful of large Web site partners it pays carriage fees to including
AOL, Netscape and Lycos. It inked the AOL deal August 28 with a clause that
gives AOL right of first negotiation in a takeover.

While its focus has been on providing outsourced content in the form of
directories, Infospace now looks like it may be turning its sights inward
to make more of a destination than in the past.

Given July’s rush and April’s peaks, Internet stocks are a long way from
the summits seen this year. Will the IPO market rekindle? September is a
sleeper traditionally and October may provide a window for this group to
debut. More than ever the market takes its cues from the economic broad
strokes. Not unlike Star Wars, the jump to hyper speed–a huge IPO
valuation–may be as close as an upswing in the Dow or as far yonder as
another disturbance in the force.

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