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Technology Stocks : America On-Line (AOL) -- Ignore unavailable to you. Want to Upgrade?

To: Joe S Pack who wrote (34155)	11/16/1999 12:47:00 PM
From: Craig A	Read Replies (1) \| Respond to of 41369

nternet stocks that beat the hype Analyst picks portals as holiday e-commerce plays By Kristen Gerencher, CBS MarketWatch Last Update: 12:05 PM ET Nov 16, 1999 Personal Finance News Join the discussion SAN FRANCISCO (CBS.MW) -- The holidays are set to be a mixed bag for Internet stocks. With more than 150 publicly traded online firms competing for advertising dollars and a piece of the e-commerce action, investors may be wiser to play it safe with the portals, says Andrea Williams,ÿInternet analyst at E-Offering, an investment bank specializing in Internet companies. Williams told CBS MarketWatch which early entrants to the Web frenzy are poised to harvest the most growth for the new millennium. CBS.MW: How have the stocks been moving? Williams: As usual, they've been volatile. In the last week or so, it's generally been very good. A lot of the stocks have been up substantially and I think there's a lot of continued optimism about the near-term performance of these companies. CBS.MW: Of course we have to hit the overvaluation question. What's your opinion? Has this been overblown, or how should investors approach this question? Williams: This has been a challenge for investors in the Internet forever. These stocks' valuations are beyond comprehension under traditional valuation metrics. But what we've seen is investors are willing to buy these companies because they're buying a piece of the future. They believe that these companies will become very significant in their respective industries over a relatively short period of time -- let's say the next three to five years -- and that the value down the road will justify the excessive valuations today. Those who have invested and held these stocks have generally come away much better off than a lot of folks who trade them.ÿ CBS.MW: What are your picks right now? Williams: We're still pretty positive on a couple different companies in the broader portal arena. We feel very good about AOL (AOL: news, msgs) and Yahoo (YHOO: news, msgs). As we move into the holiday season, these companies that don't actually sell goods themselves are going to be the logical starting place for many holiday shoppers. We saw them benefit tremendously last year. We think we'll see the same thing this year. That's kind of a safer way to play the holiday season than trying to pick an individual e-commerce winner. If you're trying to bet on an individual e-commerce company, I think Amazon (AMZN: news, msgs) is still interesting here in the near term. But I think there's heightened sensitivity to the losses they're sustaining, and projected losses. Another company we like is Student Advantage (STAD: news, msgs), which is on the content side, targeting we think a very attractive demographic with preferential access to that group, and (it) trades at a relatively attractive and inexpensive valuation. CBS.MW: What does Student Advantage do? Williams: They are essentially a commerce and content portal for the college student demographic. They provide students with discounts at major national retailers as well as a number of local spots around colleges -- so popular restaurants and stores and the bars around a college. They have a unique relationship with students in that they've got almost a credit card type relationship. Each student is identified by a particular ID number. So they're able to collect much greater information on who their users are and offer a much greater value to their merchant partners. CBS.MW: How big are the privacy issues facing these companies? Do they stand to lose a lot of consumer confidence? Williams: The privacy issue is an important one, but I think we see most of these companies acting responsibly and not kind of exploiting the individual data about consumers and instead aggregating that to some level and using that to provide the value to the advertiser. CBS.MW: Do you have any other picks? Williams: If you're looking for an international opportunity, I think StarMedia (STRM: news, msgs) still looks very attractive. They're sort of the leading portal for Latin America. See Thom Calandra's StockWatch.