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Strategies & Market Trends : Cents and Sensibility - Kimberly and Friends' Consortium -- Ignore unavailable to you. Want to Upgrade?

To: Kimberly Lee who wrote (18996)	10/15/1999 2:19:00 PM
From: JeanD	Respond to of 108040

This is from Steve Harmon on WOMN: Once the domain of testosterone cowboys the Web becomes more mainstream daily. Surprising then that few companies focus on half the Internet's current user base: women/females. Namely two companies. Two. Amazing. In two words I can count the dose of estrogen-enhanced Internet on Wall Street: iVillage and the soon to go public Women.com. The latter wants to go public this week at a just-reduced price per share of $8 - 10. That values each of its unique monthly users at $88 vs. the already-public iVillage (IVIL) value per user of $158. The table: __________________________________________________ Women on Web/Wall Street monthly users market value per user iVillage 5.02 $792.00 $157.80 Women.com 4.62 $406.40 $87.91 note: Women.com is IPO market cap target; in millions except per user (c) 1999 e-harmon.com, Inc. Share with a friend! __________________________________________________ But that's not the whole story. iVillage results lead Women.com by about a 2-to-1 ratio. IVIL posted $15 million revenue for 1998 vs. $ Women.com's $7.2 million. For the first six months of this year iVillage had $14.6 million revenue, already matching all of last year's top line. Women.com, meanwhile, posted $9.7 million for the first six months of 1999. But let's do some "all things being equal math" and see that if we took the revenue on a comparison basis as a proxy for valuation then Women.com could be properly valued at $104 per user or $481 million. That assumes the Street sees the "real" value of either companies, which I don't think it does. First of all with the scarcity of female-centric Internet experiences I think the underserved demographic desperately seeks affinity sites to surf to, buy from, and other likeminded people to communicate with. My own valuation on iVillage says that the world's leading women Web firm should command a premium and a meaningful valuation. The overall top 10 Web sites enjoy a wide array of values per unique user on a general purpose basis. And those are mostly browsers not buyers. Investors forget the shopping litmus rule. Translated it's that 80% or so of all buying is done by women. Walk through any mall and see which items are displayed first in any department store: women's clothes, women's shoes, women's jewelry. No accident. Women are the buyers. So a user of iVillage and Women.com ought to be worth more than a straggler on a general purpose Web portal. The lifetime value of a e-shopper is probably $250/year. That's 8 items bought per annum. $30 bucks per item or so. Makes sense. On that alone I believe that as both iVillage and Women.com "ecommerce-ize" their content networks the value could become apparent. True that most revenue today is derived from ads. That's also a great revenue flow for bulk sites like these two. Anyway, longer term a $250 valuation per unique user to me is a benchmark, a 1x future shopper flow stream discounted into the equation. On a present value basis I would bring it to a minimum of $175 for IVIL and give Women.com the benefit of being a close #2. Indeed, Media Metrix reports iVillage ranked 28th in the world and Women.com ranked 29th. In the world. That's ALL Web sites globally. With 150 million global users that's 75 million women surfing for a home to call their own, with a weighting to the U.S. now in users overall. The key for both these companies will be strong global media partners which they both have. Women.com has Disney and Hearst. But more than partners it will need to think in different cultures and languages. English is the lingua Web now but Japanese, Swedish, German, French, Chinese, Portugese grow in usage daily. As Women.com makes it expected debut this week few may understand the focus, the scarcity of these stocks on Wall Street or realize the value of reaching one of the world's most powerful demographics. *********** named by CBS.Marketwatch to "Best of Wall Street" share this with a friend, they can sign up at e-harmon.com __________________