WEBDEX: Lycos Gains Users, Value Gap Emerges?

The latest WEBDEX shows Lycos (NASDAQ:LCOS) has been on a hunting spree that
has pushed it from number seven to four in the top 10 Web site rankings. With
the buys Lycos grew 22% in users. Yet AOL, Microsoft and Yahoo users all
are valued at more than twice to three times the spidersite turned
community hub. In doppler fashion that may mean its valuation per user
hasn’t caught up with the shift.

This could suggest that Wall Street values LCOS in the same vein as
GeoCities (NASDAQ:GCTY), which on a WEBDEX basis trades near each
other.

The overall average for the top 10 Web sites (or Web site
divisions only for multiple sided companies) popped 7.7% to $113 since
September 9.

The average without Yahoo is $88 per user, more in line
with Excite (NASDAQ:XCIT). With the pending paunch of more sites we
allocate a higher PMV on Disney.com at $1.2 billion.

That may help
Infoseek (NASDAQ:SEEK) once it’s clear who’s who and what’s what with its
pending deal with the Magic Kingdom. As you recall, Disney agreed to
acquire a 43% in SEEK and merge its Starwave interests. Infoseek, by the
way, announced a new search tool September 16 that it calls Express which will
offer “meta searches” of all the engines/guides in one go from the browser.

Geocities, Microsoft and Disney were the only two other sites shown to
gain users in August vs. July’s tally from Relevant Knowledge.

In the rankings Netscape (NASDAQ:NSCP) dropped from fourth to sixth. It’s
announcing a deal with telco upstart QWEST today that may boost its ranking
over time. Netscape perhaps needs a community aspect that could boost its
numbers and add depth to Netcenter as a place to be and build and buy. For
that matter, so does Yahoo and Microsoft. Yahoo’s Clubs are one flavor but
there are flavor and flavor(s).

AOL told investment conference attendees on September 15 at a Nationsbank
Montgomery Securities conference in San Francisco that its goal for 1999 is
to get half of all new Internet users on AOL. AOL president Bob Pittmann
said that about 15 million of 23 million U.S. Internet households use AOL
as the gateway.

With such high volume coming through its cached servers,
that could translate into higher numbers in the overall AOL.com numbers
here. If counted fully cached, we suspect AOL may be ranked first, and we’re
not counting AOL online-only users since chances are they use both AOL
Online and AOL.com. The line blurs every second for those who’ve followed
the design of AOL.com.

One of the more interesting notions about WEBDEX
is that users are likely to visit perhaps two or three of the above sites.
It is the McDonalds-Burger King scenario. One day you have lunch at one
and the next at another.

So with Web sites can you be valued at $335 while
perusing Yahoo and then $71 as you check HotMail? Absolutely. One surrounds
you with commerce and content while the other lacks the shelves to put
things for sale on.

By the way, the folks at Internet World print put together a great listing
of financial ratios and goodies on the top 50 largest Internet companies.
It’s the IW50. I encourage you to check out the fantastic lists here and
sorts. Bookmark it as one place for any investor in the Internet to go to time
and time again for some powerful research and stats.