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Technology Stocks : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: Don Westermeyer who wrote (2770)	4/4/1998 9:25:00 AM
From: Glenn D. Rudolph	Read Replies (2) \| Respond to of 164684

While Doubters See Icebergs, Internet Stocks Keep Steaming By NICK WINGFIELD THE WALL STREET JOURNAL INTERACTIVE EDITION SAN FRANCISCO -- Before shares of Yahoo! Inc. closed Friday at $102.375 -- below an all-time high of $105.75 hit earlier in the day -- the bears chattering away on Internet bulletin boards began to grow insistent. "All rational analysis is gone if this stock ends at over 100 today," one denizen of the Yahoo discussion group on Yahoo's own finance bulletin boards wrote -- a denizen who was surely disappointed, as markets closed, at the lack of reasonable analysis in the world. "Is there some symbolism between Yahoo and the Titanic?" asked another. "An overhyped ship/movie and an overvalued/overhyped stock. Sinkable, I think YES!" ------------------------------------------------------------------------ Close 3/27Close 4/3ChangeAmazon.com82 3/49312%AOL66 7/874 1/211%CDNow23 3/828 3/821%EarthLink56 1/867 1/420%Lycos42 5/85938%Yahoo88 15/16102 7/1614% ------------------------------------------------------------------------ If Internet stocks are sinkable, one thing's for certain: The waters were clear of icebergs this week. On a day when the Dow cracked 9000 for the first time before falling back, Yahoo's two-day dance above the 100-a-share mark was among the most impressive performances in a phenomenal recent rally in Internet stocks. Web-navigation service Lycos Inc. and cyberbookseller Amazon.com Inc. also soared to all-time record territory, as did CMG Information Services Inc. and America Online Inc. Clearly, the prospect of continued meager profits in coming years -- if any at all -- isn't enough to sink Internet stocks. For now, Wall Street seems content to base the value of Internet companies on the financial performance they may turn out in the early days of the new millennium, not on the red ink many of them are swimming in today. Until then, firms like Excite, Amazon and others will have to spend aggressively to capture market share and to build their brands into household names. Keith Benjamin, an analyst at BancAmerica Robertson Stephens & Co., believes investors are now looking as far out as 2001's earnings when valuing Internet companies. Accordingly, this week he raised his share price target on one on-line stock, AOL, to $85 from $75, basing the new figure on a 50 multiple of 2001 earnings per share instead of a 50 multiple of 2000 earnings per share. He wrote that he was encouraged this week by AOL's announcement of a trial for high-speed access to AOL using digital subscriber line, a technology that could accelerate connection speeds by up to 25 times that of conventional modems. The technology isn't likely to be widely deployed anytime soon, but, if and when it is, Mr. Benjamin said, it will encourage users to stay on-line longer, buying more goods and scanning more advertisements. In the meantime, bad news for other high-tech sectors has actually benefited Internet stocks, analysts believe. Profit levels at hardware firms such as Intel Corp. and Compaq Computer Corp. are suffering due to the explosion in popularity of sub-$1000 personal computers. But ironically, their pain is seen as the Internet's gain as legions of new users log on to the Net with the low-cost machines. Even investor profit-taking -- if and when it happens -- may not set Internet stocks back for long, analysts believe. "There have been a series of cycles where these stocks rally, then there's some profit-taking and then they rally again," said Andrea Williams, an analyst at Volpe Brown Whelan & Co. "It's three steps forward, two steps back," added Henry Blodget, an analyst at CIBC Oppenheimer & Co.