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Technology Stocks : Altaba Inc. (formerly Yahoo) -- Ignore unavailable to you. Want to Upgrade?

To: Jim who wrote (15192)	11/13/1998 10:33:00 AM
From: stock_bull69	Read Replies (1) \| Respond to of 27307

PALO ALTO, Calif., Nov 12 (Reuters) - Internet stocks climbed to new highs again on Thursday as more investors betted -- some would say gambled -- that online businesses would be the big winners in the holiday shopping season and beyond. But the rally was not limited to Internet retailers. Avtel Communications Inc. <AVCO.O> was up more than twelve-fold -- beginning the day at $2.25 and ending at $31 on Nasdaq -- following its launch of a new Internet service with a high-speed modem it said will make connections 50 times faster. Avtel's stupefying rise capped several days of strong gains for the whole sector, which analysts say was fueled by the approaching holidays. The hope is that consumers will stay away from the malls this year and instead buy their books from the likes of Amazon.com <AMZN.O> and their music from online businesses like K-Tel International <KTEL.O>, generating a new level of familiarity with the Internet, and confidence about placing online transactions. There are now even places where you can do some virtual window shopping, thanks to auction sites like EBay Inc. <EBAY.O>, that sell a range of merchandise that changes from day to day. Shares of EBay, which just in September went public at $18 a share, rose to $126 on Thursday, up more than $10 on the day. Amazon.com rose $4.375 to $131. Other online businesses like the popular Internet directories Yahoo Inc. <YHOO.O> and Excite Inc. <XCIT.O> enjoyed yet another day of strong gains, while Earthweb Inc. <EWBX.O>, an online resource for computer professionals, shot up $20 to $69.25. To provide some perspective, it was just two days ago that Earthweb went public at a mere $14 a share. Although Earthweb is not even an online retailer, and has a business plan that is hard to understand, investors were not in the mood to split hairs. Just knowing that the company had some sort of Internet-related business was enough for them to buy the stock. Some financial analysts however, including those who are generally optimistic about the Internet, suggested this latest wave of buying was a bit foolhardy. "Frankly, I don't get it," said one financial analyst who asked not to be identified. "I have not talked to a single institutional investor who owns Earthweb stock. I'm sure there are some but it's mostly individual investors." Although stocks purchased by big investment houses are not as a rule superior to those picked up by individuals, heavy individual, or retail buying sometimes sparks concern that the stock is being unjustly inflated. Similar concerns were cited about K-Tel, which sells classic rock compilations, and has more than doubled since Tuesday, when it announced its online music and home video service would be featured on the Microsoft Network Shopping Channel. Although K-Tel stock retreated $4.625 to $28 on Nasdaq on Thursday, it has held onto most of the gains associated with the Microsoft deal. It is a deal some industry experts say the average investor doesn't understand. They say simply forming an alliance with an industry leader like Microsoft is by no means a guarantee of success. "We did that exact same deal with Microsoft, and we didn't even think it was worth announcing in a press release," said the president of another online retailing business, who asked not to be named. "Microsoft doesn't exactly have the No. 1 trafficked Web site." But while not all of these investments can be justified, analysts say many of them can. "Generally speaking, Amazon has clearly earned their (stock price) relative to their competition," said Volpe Brown Whelan analyst Derek Brown. "They are the No. 1 player in two online retailing categories (books and music) and their customer base is significantly greater than their closest competitor." By all accounts, businesses that already have popular online stores, are likely to do very well over Christmas. One recent survey projected a three-fold increase in online shopping over last year. Some predict that once customers discover the ease of shopping this way, even catalogue shopping by phone will seem like too much trouble. "Yes, it looks like the holiday season should be very strong," said William Blair & Co. analyst Abhishek Gami. "But it's a seasonal business, and people may not have thought about how sales will again fall off after the holidays."