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Technology Stocks : InfoSpace (INSP): Where GNET went! -- Ignore unavailable to you. Want to Upgrade?

To: Mr. Jimmy who wrote (450)	11/6/1998 4:28:00 PM
From: Technologyguy	Read Replies (1) \| Respond to of 28311

Dow Jones on GNET: Go2Net: Tech Know-How Should Lure Users,May Lead To '99 Pft By PAULA L. STEPANKOWSKY Dow Jones Newswires SEATTLE, Wash. -- Go2Net (GNET) doesn't want to use the Internet to sell books, games or financial advice. But the company's technology makes it easier to find out about online goods and services, something the company hopes will attract more users - and advertisers - to its growing collection of Web sites. This strategy is designed to keep the company's gross margins high and may help it become one of the few Internet-related companies making money by 1999, Chief Executive Russell C. Horowitz told Dow Jones. "Our focus is leveraging our position in technology, as opposed to dealing with fulfillment issues," Horowitz said. Horowitz said Go2Net, which went public in April 1997, decided early that there were four communications categories that translated well on the Web: personal finance, Web searching, commerce and multiplayer games. Go2Net then either built or acquired key Web sites in these four areas, including Silicon Investor, one of the Web's largest personal finance sites; MetaCrawler, which searches other search engines; WebMarket, a one-stop comparison shopping service; Hypermart, a provider of free business Web hosting services, and PlaySite, a Java-based multiplayer online games site. "We all have limited resources, so we said let's look at what we do well and what other people do better," Horowitz said. "We felt we could compete with our technologies." The company also has a division called Go2Net Labs, which develops technologies for use on its Web sites as well as for licensing to other Internet companies. Horowitz said the company doesn't view itself as an Internet portal but as a portal to its own Web sites. In September, the company recorded 1 million people logging on to its sites at least once a day, Horowitz said. Its personal finance and Web search sites grabbed the most viewers. Go2Net is not widely covered by analysts yet, but Horowitz said he's comfortable with an estimate that the company will lose 10 cents a share in the fourth quarter, which would add up to a loss of 48 cents a share for the 1998 fiscal year ended Sept. 30. The 10-cent estimate includes some one-time charges. In the 1997 fiscal year, Go2Net lost $1.75 million, or 53 cents a share, on sales of $528,595. All figures have been adjusted to reflect the acquisition of Silicon Investor, which was finalized in June. Keeping gross margins high by keeping the costs of product development low is a key to Go2Net's strategy, one that CEO Horowitz hopes may help the company turn a profit in 1999. "We felt we had a chance to be a leader when people started to focus on profitability," Horowitz said. "We have this low overhead model and low customer acquisition costs, and with expanded revenue opportunities, we have tremendous leverage." Horowitz said each site the company operates has an interactive message board. The company lets its site users tell it what features they want on the sites. "The back end is all software," Horowitz said. "Once you create it, the incremental cost is virtually nothing for us." The company's gross margin in the third quarter was 60%, a figure Horowitz said he would like to see increase to the low 70s in the next year. "I think it's achievable," he said. Go2Net makes money by selling advertising on its sites and subscriptions to Silicon Investor, and by licensing its technology. Horowitz said the company now has more than 200 advertisers. "Each site has its own underlying characteristics that allows us to participate in each of those revenue streams," Horowitz said. Go2Net is launching a national marketing campaign to increase public awareness of its sites but is targeting spending in what Horowitz called "Web savvy" cities, such as Seattle, San Francisco, Boston and New York. "Plenty of people focus on newbies," Horowitz said. "We're the people who, once people discover us, they stay with us." Horowitz said Go2Net still has cash on hand to make acquisitions, something the company has done mostly through stock transactions to date.