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To: Venkie who wrote (119018)	4/19/1999 9:26:00 PM
From: Mohan Marette	Respond to of 176387

A very natural cooling off period & Stick with the leaders they say. I thought we are,oh well let's see what fortune or misery tomorrow will bring. ================== Monday, April 19, 1999 Internet infatuation gives way to pragmatism By Larry Barrett April 19, 1999 2:47pm ZDII After taking a bath last week, Internet investors were hoping for a strong rebound Monday. So far it hasn't happened. Several converging factors are testing the will of these investors, not the least of which being lackluster earnings from the likes of Excite and Onsale. While most Internet analysts are convinced this is just part of the natural maturation phase for Internet stocks, each concedes that buying leaders is the only strategy to guarantee any long-term success. That philosophy necessarily means getting out of the risky, flavor-of-the-week offerings which means the bulk of the Internet sector takes it on the chin. "There are probably a handful of factors that are equally contributing to Monday's decline," said Derek Brown, an Internet analyst at Volpe Brown Whelan & Co. "This quarter's earnings from Excite and Onsale probably raised some questions about the industry as a whole. Then you've got Compaq's warning. And the valuations are too high for some of these stocks." The sky might not be falling in the Internet market, but a few chinks in the armor were exposed last week when Excite Inc. (Nasdaq: XCIT) and Onsale Inc. (Nasdaq: ONSL) both missed analysts' estimates, a rarity in a category that's enjoyed unfathomable sales growth over the past year. Making matters worse, the market as a whole has temporarily abandoned technology stocks in favor of more consumer and commodity-based stocks. While the Dow continues its unprecedented climb for the 11,000 threshold, the Nasdaq keeps losing ground. "It's a very natural cooling off period," Brown said. "Some of these stocks have enjoyed incredibly strong runs for three months or as long as 2 years. There's some rotation out of the Internets and technology stocks in general." On Monday, some of the online world's biggest names took a beating. America Online Inc. (NYSE: AOL), perhaps the only legitimate blue-chip Internet issue, plunged 15 ¾, or 11 percent, to 124. CMGI Inc. (Nasdaq: CMGI) tumbled 25 9/16 to 235 5/16, off more than 20 percent in less than a week after peaking at 302. NetGravity Inc. (Nasdaq: NETG) shed 11 1/8, or 25 percent, to 33 5/8 while Yahoo! Inc. (YHOO) and even eBay Inc. (EBAY) lost 16 3/16 and 15 3/8 a share, respectively. Keith Benjamin, an Internet analyst at BancBoston Robertson Stephens, said the downturn in Internet stocks could be a blessing in disguise. "The challenge for the lesser-company stocks has been figuring out when to sell, because the valuation ranges started high and went to galactic levels," Benjamin said in a research report. "(Last) week, many investors blinked. "We expect reporting season to remind investors how difficult it is to compete on the Web, with few companies having big, scalable brands." Even Infoseek Corp. (Nasdaq: SEEK), which reported a smaller-than-expected loss in its latest quarter, took a pounding because its total sales fell short of some analysts' expectations. Looking ahead to this week, companies such as Xoom.com (Nasdaq: XMCM) and RealNetworks Inc. (Nasdaq: RNWK) will report quarterly results. First Call consensus expects RealNetworks to lose 26 cents a share in the quarter and Xoom.com to drop 3 cents a share. RealNetworks shares were off 11 ½ to 159 while Xoom.com shed 14 1/8, or 17 percent, to 70 7/8. Benjamin said sticking with the leaders, despite the recent sell-off, will save investors a lot of sleep and money. "We only want to own the big franchises showing fundamentally sound business models with marketing more a function of word-of-mouth than aggressive spending," he said. He recommends AOL, Amazon.com Inc. (Nasdaq: AMZN), Lycos Inc. (Nasdaq: LCOS) along with Ticketmaster-Citysearch Inc. (Nasdaq: TMCS), Network Solutions Inc. (Nasdaq: NSOL) and CNet Inc. (Nasdaq: CNET). --------------------------------------------------------------------------------