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To: American Spirit who wrote (12757)	4/25/1999 10:59:00 PM
From: Jenne	Read Replies (2) \| Respond to of 41369

Even if the market suffers a meltdown, these ten companies will survive. By Andrew P. Madden The Red Herring magazine From the May 1999 issue 10 BULLETPROOF INTERNET STOCKS (Click for stories) eBay InfoSpace.com Amazon.com America Online Charles Schwab AT&T Inktomi Yahoo MindSpring Enterprises TMP Worldwide The quest to understand Internet stocks can be as befuddling as it is educational. In July 1996 we thought we'd seen it all. The stock market had finally abandoned flimsy Internet deals. "On July 11, a speculative bubble burst and a score of improbably overvalued public companies with scant profits, little cash, modest revenues, and unproven business models found themselves worth very little," we wrote (see "The 1996 IPO Bubble," September 1996). Intoxicated by our own pessimism, we wondered if certain companies would even recover. We issued this sobering assessment of the portal site Excite: "The company went public in April at a valuation of $177 million, but the future no longer seems that bright." Excite, which as of early March had a market capitalization of $6.3 billion (Nasdaq: XCIT), did, of course, recover. In fact, many companies withstood the lean days of the summer of 1996 and are now (or rather, are again) among the most hyped stocks on Wall Street. Back then, we hadn't given ourselves over to the whimsical behavior of Internet stocks -- the befuddling part. As for the educational side, most investors and observers have now learned that rational metrics have little to do with Internet stocks. To use the language of the Internet, the rules for valuing such companies have been created on the fly. However, in the absence of hard-and-fast rules, there are still useful, if slightly unorthodox, methods of appraisal. One way to proceed is to envision a worst-case scenario. Imagine Fed chairman Alan Greenspan lamenting the end of the boom cycle. Imagine a jolting stock-market correction or, worse yet, an outright crash. Such events are far from impossible. Then ask, Of the companies populating the Internet sector, which would be left standing? Which are creating bulletproof business models and seizing markets in such a way that they could endure a depleted economy? Many weaker Internet companies, no longer able to tap the capital markets for growth and with no profits in sight, would go out of business. Of course, faced with such a scenario, even the strongest of companies would be in for a rough time. However, what makes our ten picks different -- and capable of long-term growth -- is the market leadership that most of them have already purchased with their capital. Each has a broad user base. Although many of these companies are not yet profitable, the intelligence they gather about their users is the most valuable currency in the Internet world. It allows them to understand their users' proclivities and to articulate a demographic to advertisers. It fortifies them against their competitors and, over the long run, against the undulations of the stock market. Several of the companies on the list were obvious choices. Yahoo, America Online, and Amazon.com are veritable cornerstones of the Internet. If they can't withstand market turbulence, then no Internet company can. Infospace and Inktomi are second-generation Internet companies that provide vital infrastructure and services to the portals. Other choices, like AT&T, Charles Schwab, and TMP Worldwide, may not be traditional Internet companies, but they are attractive because of their recent forays onto the Net. The Internet service provider Mindspring Enterprises is thriving in a market where many have withered, and the online auctioneer eBay is building a huge following of paying users. To be sure, understanding, defining, and valuing Internet stocks remains a puzzling affair. However, with these ten companies, the picture is clear.

To: American Spirit who wrote (12757)	4/25/1999 11:06:00 PM
From: Martin A. Haas, Jr.	Read Replies (1) \| Respond to of 41369

American Spirit, Here are the Internet 10 (Bulletproof) stocks from May's Red Herring in no particular order: 1. EBay 2. Infospace.com 3. Amazon.com 4. America Online 5. Charles Schwab 6. AT&T 7. Inktomi 8. Yahoo 9. Mindspring Enterprises 10. TMP Worldwide I subscribe to Red Herring. Check out the Website at redherring.com It's a great mag. and I think a must read for tech investors. It has very informative articles about current and future trends in tech. I often find myself reading the articles a couple of times as the info is quite detailed. Regards, Marty