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To: MR. PANAMA (I am a PLAYER) who wrote (13050)	8/9/1998 8:41:00 PM
From: Glenn D. Rudolph	Respond to of 164684

IPO VIEW- Hot Internet deals face turbulent market Reuters Story - August 09, 1998 18:56 %BUS %ENT %US %WHO %JP %PUB %TEL %IPO %ISU %STX USAI 9984.T ZD AMZN YHOO CSN V%REUTER P%RTR By Holly Rosenkrantz NEW YORK, Aug 9 (Reuters) - Hot offerings from CitySearch Inc. and GeoCities highlight a pack of Internet-related companies set to go public this week, but analysts cautioned the wider market's gyrations could damage their prospects. It seemed ironic to some IPO watchers that the broader market's deepest and most dramatic plunge of the year came the very week before CitySearch and GeoCities, two of the most highly-anticipated Internet deals, are scheduled to go public. For months, Internet offerings have managed to withstand increasing choppiness in the new-issue market, showing strong gains after going public while most other deals have been slimmed down because of weak demand. But people who buy and sell IPO shares said the correction of the past week has, at least for now, wiped out any desire to speculate on new stocks. Investors are suddenly on the defensive. "Small-cap fund managers have seen their portfolios get obliterated this week, just beaten to pieces, and a lot of people are dealing with double-digit losses for the year," said Claudia Mott, director of small-cap research at Prudential Securities. "People have no cash, and its unlikely they're going to start selling a stock to bet on something new." Still, the buzz over CitySearch and GeoCities has been strong enough to create demand for the deals. The two companies have some things in common. Both are being handled by what the IPO market considers strong underwriters: GeoCities by Goldman Sachs, and CitySearch by NationsBanc Montgomery Securities. Also, both companies have the support of some high-profile investors. CitySearch is 17 percent owned by Barry Diller's USA Networks Inc. , and GeoCities is 30 percent owned by Japan's Softbank Corp. , which sold its publishing unit, Ziff-Davis Inc. , to the public in an April IPO. But the two have different business and income profiles. CitySearch is an online arts and entertainment guide. It revenue comes from local businesses, who pay CitySearch to create and maintain advertisement sites on the World Wide Web. GeoCities runs a service for creating online communities. The company helps individuals build Web sites, and rather than charging them for the service, the company gets its revenues from advertisers. Of the two models, CitySearch is seen as having a more solid revenue source. But GeoCities is rated among the most-visited sites on the Internet -- the type of credential that in a better market would send investors into a frenzy, analysts said. "GeoCities is in the same league as Amazon.com and Yahoo in terms of recognition," said Ryan Jacob, director of research at the IPO Value Monitor. But whether that will matter to investors this week will hinge on how the big ocean of stocks performs on Monday, analysts said. If the market recovers some of the past week's losses, underwriters are expected to push ahead with GeoCities and CitySearch. Other well-watched deals on the schedule are Convergys Corp., a unit of Cincinnati Bell Inc. , cable modem maker Terayon Communications Systems and three Internet-related companies: 24/7 Media, Digital River and Entrust Technologies Inc. "GeoCities and CitySearch are known names with known underwriters, and if the market is alright Monday, I think they can get these done early in the week," said Patrick Ashe, syndicate manager at C.E. Unterberg, Towbin. "But to be honest, the phones are not ringing off the hook with people asking about new issues."