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Technology Stocks : CNET: The Computer Network (NASDAQ:CNET) -- Ignore unavailable to you. Want to Upgrade?

To: Jenne who wrote (950)	7/3/1999 7:15:00 AM
From: nord	Respond to of 1133

By Emily Church and David Wilkerson, CBS MarketWatch Last Update: 5:10 PM ET Jul 1, 1999NewsWatch NEW YORK (CBS.MW) -- Two big announcements are sending the message Thursday that online advertising spending is set to swell while Internet companies are looking offline for brand exposure. Today on CBS MarketWatchDow, Nasdaq, S&P set recordsCrude closes at 19-month highbonds eke out narrow gainsUnemployment, job creation edge upStockWatch: Keep watching those theater stocksMore top stories...CBS MarketWatch ColumnsUpdated: 7/2/99 4:37:26 PM ET CNet's (CNET: news, msgs) stock dropped 10 percent, or 5 7/8, to 51 3/4 after the company revealed plans to spend over $100 million on marketing its brand over the next 18 months and report a loss for 1999 as a result. Meanwhile, Yahoo (YHOO: news, msgs) trumpeted an expanded marketing relationship with Proctor & Gamble (PG: news, msgs), one of the nation's biggest ad spenders. The portal didn't give much indication how the pact will boost its own bottom line. Investors poured into the stock, sending it up 5 to 177 1/4. "Certainly, it sounds like another ad deal that could add to Yahoo's revenue," said Daniel King, analyst at LaSalle St. Securities in Chicago, adding that "whenever you have a large mainstream advertiser move more spending online that's going to be good for a wide-range of Internet companies." See Internet Stocks. Offensive move CNet said it's spending the cash to "establish CNet as the one place to go for computer and technology information." Chief Financial Officer Doug Woodrum said CNET hopes to acquire new users "at a value of $15-$20 per user, in terms of what we expect to get back from this $100 million." Some 40 percent of the campaign spending is earmarked for television followed by 19 percent on print; 15 percent outdoor; 11 percent radio; 10 percent online and 5 percent on events and promotions, he told CBS.MarketWatch.com. "The risk here is that it doesn't work, that they spend an incredible amount of money and don't develop the brand awareness and the traffic," said analyst Derek Brown at Volpe Brown Whelan. "My sense is that this is a tremendous opportunity and I think they are wise to take advantage of it," he added. "CNet's focus is very different in this space. They're looking to become the dominate aggregator of buyers and sellers of technology products and services," he said. CNet said it would finance the marketing campaign "through its balance of cash and marketable securities, which currently totals approximately $700 million." The company has $200 million in cash and about $500 million to $600 million in near-liquid securities, Brown said. See full story. Hambrecht & Quist analyst Daniel Rimer told clients he was raising his 1999 revenue estimate to $100 million from $93 million after factoring in the marketing initiative, and lowering estimates to a loss of 53 cents per share for the year, down from an estimate for a 19-cent per-share gain. He maintained a "buy" rating on the online media company. "While we consider this ad spend to be aggressive, and while the campaign will sacrifice earnings for the second half of 1999 and into 2000, we believe the campaign may prove invaluable over time," Rimer said. Emily Church and David Wilkerson are reporters for CBS.MW.