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THE DAY AHEAD: Hack attacks become branding event for some Net firms

On the Web, branding is everything. So it comes as no surprise that some Net companies are using that latest round of hack attacks as the ultimate branding opportunity.

The great hack-a-thon (see special report) continues as the largest sites on the Web get hit by the dreaded denial-of-service attack. Bringing down a site by flooding it with requests may be evil, but it spells opportunity for some companies that wouldn't get press under normal conditions.



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By now everyone knows about the dreaded denial-of-service hack -- a technique where a site is overloaded with page requests (See how it works).

With the Federal Bureau of Investigation on the case and the list of victimized sites growing longer, the hack attack has become a media circus. That means some players in the Media Metrix top 20 must be begging to be attacked just for the public relations and a potential market boost.

Don't be surprised if you see something like this in the next few days:

    SAN FRANCISCO -- Alsoranportal.com suffered an outage for three hours Thursday after devious hackers launched a denial-of-service attack.

    "These hackers must be stopped, but we fixed the problem quickly. As one of the fastest-growing properties on the Web, we should have known we would be a target. It's a validation of our business model," commented CEO I.M. A. Crook.

Here's the logic behind the "branding in crisis" theory: If hackers attack a site, it must mean that it's important enough to get hacked and one of the bigger players on the Web. Put the CEO on TV and look like a Web leader. For some companies, a little hacking adversity could be a springboard to bigger things.

Buy.com (Nasdaq: BUYX) gets hacked the day of its IPO, but shares don't miss a beat. Why? Buy.com was important enough to get hacked in the first place. The hack attack probably distracted investors from focusing on the land mines disclosed in regulatory filings.

Lycos Inc. (Nasdaq: LCOS) must be fuming because Yahoo! Inc. (Nasdaq: YHOO) and About.com (Nasdaq: BOUT) had hacking-related problems and it didn't. Will Lycos -- the fourth largest Web property -- ever get any respect? E*Trade (Nasdaq: EGRP) takes a hit, so that must mean it's more important than Ameritrade (Nasdaq: AMTD). Even ZDNet (NYSE: ZDZ), the parent of ZDII, got more exposure Wednesday than $25 million in advertising could ever provide.

Taking the "any press is good press" theory a little further, some players on Media Metrix's top 20 have got to be hoping for a hack attack for the PR boost. LookSmart (Nasdaq: LOOK) hasn't gotten a lot of press lately and should be holding out an "attack us" sign. We can see the press release now; "LookSmart suffers hack attack, we're important too."

And if Go2Net (Nasdaq: GNET) suffers an outage, maybe those hot-shot Wall Street analysts will finally take notice. The best-known analysts on the Street ignore Go2Net because they don't have investment banking ties to it.

Of course, there are other companies that will benefit directly from the hack attacks.

"The attacks are driving home the importance of security," said Lawrence York, manager of the WWW Internet Fund. We asked York to pick out a few stocks he thinks could gain from the hackfest.

His top picks were in the online security sector. Check Point Software (Nasdaq: CHKP), Entrust Technologies (Nasdaq: ENTU), ISS Group (Nasdaq: ISSX) and RSA Security (Nasdaq: RSAS) were among his top picks. All four of those companies deal with either Net security or virtual private networks. RSA had the best run Wednesday, but the others closed up in a down day for techs.

Verisign (Nasdaq: VRSN) also had a nice run because it provides software for secure e-commerce. Another one of York's favorites was Keynote Systems (Nasdaq: KEYN), which is a Web site monitoring service. Keynote has been branding savvy -- company executives are in front of the media. That extra press could be invaluable when it comes to landing new customers.