To: Susan G who wrote (16804 ) 2/10/2000 10:34:00 PM From: Roger Sherman Read Replies (1) | Respond to
But who reads the Wall Street Journal Magazine anyway? <VBG>smartmoney.com The company that knocked the socks off the finalists in the earnings-surprise and revisions categories was Internet portal Go2Net (GNET). For the last four quarters, Go2Net's earnings were, on average, 122% above analysts' expectations.stock's multiple may look high at about 183 times this year's projected earnings, it is much lower than its peers'. Yahoo! (YHOO), for example, is now sporting a P/E of 504.earnings at Go2Net are expected to rise 100% this year, Yahoo's profits should grow roughly 54%. Go2Net is also less expensive than Yahoo on a price-to-sales basis ? a measure widely used by Internet analysts ? even though its projected revenue growth is double that of Yahoo's for this year, according to Dalton Chandler at Needham & Co.survey ranked Go2Net as the 13th most popular Web site in the U.S., with more than 11 million unique visitors. Chandler notes that the company's rank on the respected list has risen from 27 in September 1998 to as low as 9 over the last few months, even though Go2Net has spent just $9 million on sales and marketing over the last year. Since Allen's investment, Go2Net has acquired six Internet content and service companies and invested in CommTouch Software (CTCH) and Click2learn (CLKS). Go2Net's partnership with Allen has also helped with publicity. While Allen has certainly given Go2Net a fancier pedigree, the company was profitable even before he appeared. One winning strategy has been to avoid depending on a limited number of Internet ad dollars for revenue. Instead, the company has found that e-commerce, hosting fees, technology licensing and subscriptions can be profitable."In terms of revenue mix, most of the other players are evolving toward Go2Net," he says. "Six or nine months ago you rarely heard Yahoo or Lycos (LCOS) talk about commerce."National Discount Brokers (NDB) . . .Chandler figures that this deal will generate gross margins of about 80%, with minimal operating expenses, and add nine cents a share to Go2Net's earnings. Safa Rashtchy at U.S. Bancorp Piper Jaffray expects Go2Net to sign more such B2B licensing deals in the next few weeks. And in the next 30 days, Rashtchy expects the company to announce lucrative financial terms of the licensing fees it will receive from Broadband Ventures for providing portal technology.
