To: GST who wrote (99113 ) 4/5/2000 9:35:00 PM From: Chung Lee Read Replies (1) | Respond to of 164684
NEW YORK, April 5 (Reuters) - It has become a tale of two Internets: YHOO reported on Wednesday first-quarter profits tripled while two lesser Internet names warned of steeper losses. For even as Yahoo said its first-quarter sales doubled and profits more than tripled, Internet magazine Salon.com cautioned of sharper losses and Web software retailer Beyond.com warned of a larger restructuring charge. In another sign of selectivity, investors piled into the stocks of suppliers of the underlying software and equipment used to operate the electronic medium while shunning second- and third-tier Internet retail and media network sites. ``Some of the smaller internet stocks that don't have a defensible market position and that are losing money will go all the way to zero or will be acquired at very low fire-sale prices,' Robert Burgoyne, technology strategist for Internet investors Monument Funds Group, said of the digital divide. Cash-strapped CDnow, an ailing Internet music retailer, continued to slide, dipping 11/32 to 3-5/8, down from a year high of 23, while Peapod, slipped another 1/4 to 3. By contrast, Yahoo said its audience grew 20 million in the past three months to 145 million users, driving up advertising and electronic commerce sales. It boasted that cash-on-hand grew $214 million to $1.175 billion and it has no debt. ``Our results in the first quarter continue to demonstrate that we have created a global service that resonates with users and a business with inherent self-reinforcing scale from which strong financial results can be derived,' Yahoo Chief Executive Tim Koogle said in a statement announcing its results. Henry Blodget, lead Internet analyst with brokerage Merrill Lynch, has argued for the past year that up to 75 percent of Internet companies ``will never make money and will eventually disappear, either through consolidation or business failure.' ``Technology is really a winner-take-all business,' said Burgoyne of Bethesda, Md.-based Monument Funds. ``Being No. 2 is really way, way behind being No. 1, and being anything less just puts you way down in the noise,' he said. Thus, while many Internet-related companies have fallen well off their share price highs, investors are increasingly flocking to those companies seen as likely winners in their market sectors.