Unearthing The Web: miningco.com Seeks IPO Motherlode

As the already-public search engines have soared to the
stratosphere and the Internet public offering pipeline on Wall Street
remains fully greased lately, here comes people guide to the Web firm the
miningco.com with its sights set on
Wall Street. But is people power enough?

Our analysis of the thin on details initial formal filings shows
miningoco.com — founded June, 1996 by former Prodigy executive Scott
Kurnit with a boatload of Prodigy refugees — adds its own twist on helping
people find useful stuff on the Web by having real people sift through the
flotsam and jetsam of Web sites and offer links to some of those its
“experts” like the most.

miningoco.com has about 600 “GuideSites” in its network with hundreds of
independent contractor human guides covering thousands of topics. Guides
live in the U.S. and globally, each paid according to traffic and usage.

Before we go on, gander at these numbers:



IPO snapshot




Proposed maximum offering

$ 50.00




$ 0.39

Nine months ending Sept. 30, 1998

$ 1.58


$ 2.10







Nine months ending Sept. 30, 1998


all figures in millions except share prices

(c) 1999 internet.com LLC

Media Metrix ranks miningco.com 26th overall in the world with 4.2 million
unique monthly users in November.

What’s a guiding light worth? The IPO filing shows miningco plans to raise
as much as $50 million. We estimate that given our five years of analyzing
Internet offerings extensively, and the mood of the market, that
miningco.com could perhaps fetch a 36x forward sales valuation, or $250
million IPO market capitalization. That’s our guess at this early stage. If
the IPO market holds perhaps the target could be $300 million to $350 million.

Recent IPO Infospace (NASDAQ:INSP), which provides wholesale guides to many
Websites, debuted strong in its IPO after pricing at $15. It closed Jan. 4
at $33.25. But Infospace runs a leaner ship with better top and bottom line
with nine months to Sept. 30, 1998 revenue of $5.4 million with a $3.6
million loss.

miningco.com’s trailing sales, on the other hand, were smallish but very
much in line with Internet content ventures, $1.578 million for the nine
months ending Sept. 30, 1998. Annualized revenue would be $2.1 million for
1998 at that rate.

miningco.com, like many Web guides, makes money from selling ads. It also
has plans (doesn’t every Web site?) to get into e-commerce/marketing.

Kurnit owns 19.9 percent, a few venture firms own between 9 and 14 percent
and surprise, Open Text (NASDAQ:OTEXF) owns 11.8 percent before the IPO.
miningco’s board includes some of Kurnit’s colleagues from his days in the
cable industry, including Viacom chief Frank Biondi.

Pros: miningco.com aims to cut through the clutter of Websites and let real
people sift out the wheat from chaff. The personal touch can make a
difference in some topics.

Cons: How many people does it take to find the best of the Web and is
someone’s subjective opinion always the best approach? Why not a
combination of expert AND user voting to rank sites higher of lower? Or
software that tracks user “viewing” and posts the top based on what people
are visiting, similar to how Media Metrix counts the top Websites in users.

miningco.com holds value in its unique approach, however, and we could see
this easily fitting with another Web company that wants to add guides to
its commerce or proprietary content. Either that or miningco.com must get
aggressive in its acquisitions to round it out as a portal potential.

Finally, tomorrow Wednesday Jan. 6, in Internet Stock
Report, Steve Harmon’s HotWatch ’99, 10 stocks he thinks may set the new
year off to a sizzle and some that may fizzle. This is the one everyone
will want to see, tell your friends.

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