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Technology Stocks : InfoSpace (INSP): Where GNET went! -- Ignore unavailable to you. Want to Upgrade?

To: Larry Zenith who wrote (9604)	7/15/1999 3:59:00 AM
From: Jeff Dryer	Read Replies (2) \| Respond to of 28311

Larry, I've been thinking about the Goto.com / Go2Net market cap comparison some more. Market cap comparisons in the Internet space are especially tough to do. Here's why? In the March '99 quarter, Goto.com reported $1.5 million in revenue and a NET LOSS of $7.4 million. Goto.com is valued at about $3 billion (a market cap where the dilutive effect of employee options is not factored in). Most Internet companies have employee option pools which typically represent 15-30% of all shares outstanding. But for unprofitable Internet companies (about all of them), these employee options go unreported... they are conveniently hidden... out of mind, out of sight. Therefore, the true market caps of these unprofitable Internet companies are about 15-30% higher than almost everyone realizes. Because Go2Net is profitable on a pro forma basis, Go2Net reports all fully diluted shares outstanding including all employee options and securities convertible to common stock. Same for Yahoo and eBay because both are profitable on a pro forma basis. Companies such as Goto.com, Priceline.com, and Amazon.com understate their true fully diluted shares, because they are not profitable and are not required to include employee options and securities convertible to common stock in the number of shares outstanding. Thus, the market caps of Priceline.com, Amazon.com, and almost all other Internet companies are understated by as much as 30%. Market caps are probably the most important measurement for comparing Internet companies relative to each other. Unfortunately, everyone (including analysts) are using different market cap numbers... sometimes inclusive of employee options and securities convertible to common stock, sometimes not. The mysteries of stock valuation continue.

To: Larry Zenith who wrote (9604)	7/15/1999 7:56:00 AM
From: Keith Howells	Read Replies (2) \| Respond to of 28311

Larry, GOTO may have a smaller cap now, but that may not be true in the near future. I love this company BUT they cant seem to pick up any coverage. Here is a recent blurb on GOTO from Briefing.Com. DLJ Internet analyst Jamie Kiggen is highly regarded among traders due to his ability to put a stock in motion... In October of last year, he launched eBay (EBAY 123 -2) by slapping a $100 price target on the stock (which on a split-adjusted basis, was trading at $16.71 at the time)... Yesterday, the analyst sent GoTo.com (GOTO 68 5/8 +14 5/8) into orbit with an initial "buy" rating and 12-month target of $100... Stock was also started with "buy" ratings at Salomon Smith Barney and Thomas Weisel.