We were all prepared to do an inside look at Inktomi’s initial public
offering for today’s report when a flood of e-mails arrived in response to
yesterday’s Morning Report that asked us who are the content players on the
Internet?
As Internet navigation stocks have skyrocketed, it seemed the content
producers, the ones that drive people to go on the Internet in the first
place, were left holding the bag.
For comparison sake, the list below shows two navigation stocks–Yahoo! and
Lycos–just to get a sense of where the multiples may be for them this year.
The three content plays we show are next: Sportsline (NASDAQ:SPLN), CNET
(NASDAQ:CNWK), and Mecklermedia (NASDAQ:MECK), producer of this report.
Web-based Content Producers
Company | Internet | Ticker | Market | Est. ’98 | Revenue |
Business | Symbol | cap | revenue | multiple | |
Yahoo | Content network | YHOO | $ 5,884 | $ 140 | 42 |
Lycos | Content network | LCOS | $ 1,220 | $ 53 | 23 |
Sportsline | Content producer | SPLN | $ 608 | $ 34 | 18 |
CNET | Content producer/conferences | CNWK | $ 534 | $ 65 | 8 |
Mecklermedia | Content producer/trade shows, conferences | MECK | $ 208 | $ 65 | 3 |
all figures in millions except multiples
SportsLine traffic has grown dramatically from 4Q96 to 4Q97, up 251% to an
average 2.8 million page views. It counts 45,500 members on its sports
service. As we said in ISR
January 15, the best thing Sportsline did to date was the deal with CBS
for eyeballs.
CBS and Sportsline inked a $57 million agreement where CBS would promote
Sportsline as the Web sports site that TV viewers could go to for more
sports info. If you watched the Olympics you know how powerful that could
be. Don’t forget, however, that as soon as SPLN posts positive earnings, a
ton of warrants become active and dilute the shares outstanding.
Meanwhile, CNET (NASDAQ:CNWK) has been busy trying to be a one-stop
Internet shop for technology industry content, search, directories, etc. It
recently inked deals with ABCNews.Com to provide it technology news and
launched the ambitious SNAP! Web directory and search service last September.
We don’t have any numbers from CNET on SNAP! and await some sort of
meaningful account for how this effort is going. CNET also dabbles in the
conference space, leveraging off its many Web sites, a great depth of content.
Since Mecklermedia produces this report we won’t get into it too far (gotta
be neutral!), but consider its Web site delivers more than 14 million page
views per month to high-income Internet professionals (more than 500,000
people estimated) on its Internet.com network of 14 Web sites.
The only print title it still publishes, Internet World trade
newspaper, is read by more than 125,000 readers each week. Central to its
revenue and earnings, there are now 27 Internet World trade shows held in
23 countries. Tradeshow Week named Internet World trade shows “the
fastest-growing shows in tradeshow history.”
But do your own homework here. Look at the balance sheets and pull out the
abacus and decide if content is king, if not now then when? Distribution
and aggregation (which we discussed in yesterday’s ISR) are valuable but
what are they distributing and aggregating if not content?
Next week we’ll delve into Inktomi’s planned IPO.
