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Technology Stocks : Egghead Computer (EGGS) -- Ignore unavailable to you. Want to Upgrade?

To: Sojourner Smith who wrote (6356)	1/27/1999 9:13:00 PM
From: Dorine Essey	Respond to of 8307

Egghead.com is in that gray area between being a full Internet business and a traditional computer vendor. Last February, the company closed its stores, added the “com” to its name and moved its operations online. Costs incurred from this new business model accounted for Egghead.com's recent disappointing quarterly returns said CEO George Orban. Egghead lost $8.9 million or 36 cents per share in its fiscal third quarter, compared with a loss of $6.6 million or 29 cents in the year-ago period. Orban said investors and the business press need to be patient. “We're clearly a new emerging business on the Internet as are many companies. And we're really not drawing any references to the past…We didn't get a clean start as an Internet company so we've had to deal with a lot of legacy issues over the last nine months,” said Orban. When it comes to stocks like Egghead.com and other Internet firms with losses, how should investors evaluate these firms? The trick is finding companies with a solid business model, said Lauren Cooks Levitan who follows Internet stocks for BancBoston Robertson Stephens. “Are customers going to the site? Are customers staying with the site? Are they getting a solid shopping experience,” she asked. Levitan said Amazon and eBay are her top picks in the retailing sector because of their “total customer experience.” She doesn't like companies that use “price as a gimmick.” Online music vendors N2K and CDNow fall into that category, she said, along with cyber auctioneer Onsale.