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To: DAY TRADER who wrote (20294)	3/2/1999 8:46:00 AM
From: Glenn D. Rudolph	Respond to of 27307

Internet companies seek ways to stand out By Andrea Orr SNOWBIRD, Utah, March 1 (Reuters) - Some of the biggest players in the Internet business convened at this popular ski resort this week to discuss why the avalanche of new volume on the Web has yet to produce much profit. Several Internet companies presenting business plans to investors at the Hambrecht & Quist planet.wall.street conference in Snowbird, Utah saw it as just a matter of time before the biggest sites become truly profitable. Others, though, suggested that a major shift to e-commerce must take place before the sites can make serious money. The plans they outlined revealed the increasingly divergent strategies emerging in the Internet sector. Search service Lycos Inc. <LCOS.O>, which is building itself up through mergers and acquisitions, sees its long-term growth strategy depending largely on the offline world. President Bob Davis defended the company's controversial merger with USA Networks <USAI.O>, which led to a drop in Lycos' share price. But Davis said the deal would help ensure it a steady stream of e-commerce revenues from USA's television channel, Home Shopping Network. Davis said that as the industry evolves, the clout of its television connection will keep it competitive. "Portals have e-commerce revenues today, but when you peel back the onion, it is clear that those revenues come almost entirely from sign-up fees," Davis said, referring to the fees portals collect for directing users to various shopping sites like Amazon.com and barnesandnoble.com. "Eventually customers will realize, 'I can go to barnesandnoble.com directly,' and the portals will be cut out of that revenue loop," said Davis. He said the Lycos/USA Networks combination created a way to bring more people online and keep shopping revenues within the portal. Yahoo! Inc. <YHOO.O>, the biggest independent Web site, derives three times as much revenues from online advertising as it does from commerce, and sees itself more as a traditional media company. Yahoo says its e-commerce business will become more important over time, but until then there is more leverage to be gained from its large audience base that generates some 5 billion page views a month. "Last year, we had 12 to 13 percent of the Web-based ad market, and we fully intend to take more share," Chief Executive Officer Tim Koogle told investors. Advertising is seen as a critical source of online sales and profits going forward, with total online ad revenue projected to grow from around $1.8 billion in 1998 to $4.4 billion in 2000 and $7.7 billion in 2002. But some participants in the conference warned that more Web sites will be battling for those ads, and building up their own audience independent of directory services like Yahoo and Lycos. They questioned whether the leading general-service portals will continue to host the most online ads over time, as consumers move beyond search portals and go directly to their favorite sites. iVillage, a site aimed women, predicts advertisers will shift their spending toward sites like their own which are more narrowly focused. "Advertisers will be moving away from portals and looking for a combination of critical mass and focus," said iVillage Chief Executive Candice Carpenter. By building a site aimed at women, she said, iVillage should be able to attract more advertisers, which are actively looking for ways to reach more women.