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2HRS2GO: National Lampoon the Web play? Not yet

    Always get the bad stuff out of the way first: Contrary to was written in Tuesday's column, Autoweb.com Inc. (Nasdaq: AWEB) actually beat analyst estimates in the first quarter. Although the company was required by SEC rules to report its net earnings per share based on the total shares outstanding before its IPO, analysts' estimates were based on total shares outstanding after the IPO.

    Now the good stuff.

    Toga party on the Web!

    Okay, maybe not. But this week's stock market believes the brand that adorned the most popular humor magazine of the 1970s for teenaged and 20-something males can reinvent itself as a comedy giant on the Internet. Shares of National Lampoon's parent, J2 Communications Inc. (Nasdaq:JTWO), doubled yesterday, on what the company believes is rising interest in its Internet plans.



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    J2 actually put out a news release back in mid-June about its grandiose plans for Web stardom. But the stock didn't respond until this week, shortly after Indianapolis-based investors Daniel Laikin and Paul Skjodt noted that they had assumed a 21.87 percent stake in J2.

    Company CEO James Jimirro credits "these guys from Indiana" from drawing the market's attention to the stock. "They became like Pied Pipers in a way," Jimirro says. "A company can say something, but when somebody else comes in from the outside and says, 'I believe this,' I think people take it in a different way."

    You can see the thought evolution of Laikin and Skjodt. Their first filing with the U.S. Securities and Exchange Commission described J2 merely as a good investment. But by the end of June, J2 had become a Web company in the eyes of the Indianapolis duo, who now portray themselves as Web networkers:

    "Registrants have introduced and would hope to continue to introduce members of management ... to persons the Registrants believe may be able to assist the Issuer in the development of its business, and in particular of its previously announced Internet activities," reads the latest ownership document filed by Laikin and Skjodt with the SEC. "Registrants may ... contact persons with whom Registrants believe it may be beneficial for the Issuer to form a business relationship and engage in discussions with such persons regarding the possibility of such business relationships."

    Pretty heady stuff for men whose main business is running the 10th largest home builder in the Indianapolis area. And just how have they helped J2 develop a Web business? "It's difficult for them (Laikin and Skjodt), because they're not in the business," admits Jimirro. "They are friendly with a man I met, whose first name is Mark, who has some kind of Internet company in Atlanta, and they feel Mark and I have some mutuality of interest. That kind of thing."

    So here's what the J2 latest runup amounts to: a guy named Mark and "some kind" of Internet company in Atlanta. Judging by the website for Laikin and Skjodt's company, I wouldn't expect much more from their end as far as Web-related resources.

    None of this is intended to cast aspersion on National Lampoon's Internet ambitions. Regardless of whether nationallampooon.com actually creates the greatest comedy website ever -- let's hope it reaches the raunchy highlights of the magazine in its heyday -- I admire the company for its rare display of fiscal restraint in today's market environment. "We're doing this internally with the funds you see," Jimirro says. "We're going to launch this site without any additional capital."

    J2 had less than $1.7 million cash at the end of April and revenues of just $208,000 for the quarter. That's a budget that tnormally doesn't even get you half a shoestring on the Web, so it'll be interesting to see how nationallampoon.com produces even a single multimedia page, let alone a full-fledged website. Stranger things have happened; Jimirro likes to point out that when he was with Disney Channel during its launch 16 years ago, his 200-employee network created more original programming and promotion and HBO, which had more than seven times as many staffers.

    But right now nationallampoon.com is literally a blank screen on your browser, without so much as a "Still under construction" message. That didn't stop daytraders from having their binge yesterday, but now they're avoiding J2 shares, judging by today's retreat. Investors should do the same, at least until National Lampoon comes out with a concrete product.

    Other issues:

  • Yahoo Inc.
  • (Nasdaq: YHOO) PaineWebber analyst James Preissler worries that Yahoo's page view growth is slowing. But don't be concerned yet -- now that the Geocities acquisition is completed and Broadcast.com is about to be, Yahoo can refocus on doing what it does better than anyone else, which is grabbing new viewers and keeping them.

    The overall market was mixed in mid-afternoon trading. With slightly less than two hours left in today's regular trading, the Nasdaq Composite Index was up 13.77 to 2756.81, the S&P 500 was down 2.95 to 1392.91, and the Dow Jones Industrial Average was off 49.39 to 11137.97. 22GO>