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Analyst gives Internet pair a thumbs-up

A pair of Internet companies received a vote of confidence from BancBoston Robertson Stephens Monday evening. Modem Media Poppe Tyson and Network Solutions were both reiterated with "strong buy" and "buy" recommendations, respectively.

BancBoston Robertson Stephens analyst Steven Birer reiterated its "strong buy" rating on Modem Media Poppe Tyson (Nasdaq: MMPT).

"We are reiterating our strong buy rating on Modem Media following recent meetings with the company's management team," Birer said in a research note. "We believe that business momentum remains strong and that the company will report an excellent September quarter. We are seeing tremendous demand for the company's services and hiring and project execution remain strong."

First Call consensus expects the developer of interactive marketing programs to earn 3 cents a share in its third quarter.

"Shares of Modem Media are currently trading near 5 times our 2000 revenue estimate, while other Internet enabling companies, such as Viant, Razorfish and iXL are trading at 19 times, 11 times, and 9 times estimated 2000 revenues, respectively," Birer said. "A broader peer group trades around 9 times estimated 2000 revenues."

Following its sparkling initial public offering in February, Modem Media shares moved to a high of 55 1/8 in April.

The stock closed up 2 5/16, or 7 percent, to 36 13/16 ahead of the research report.

Network Solutions Inc. (Nasdaq: NSOL), the leading Internet domain registrar, was reiterated with a "buy" recommendation.

On Friday, Network Solutions and the Department of Commerce announced that the testbed phase of the Shared Registration System has been extended until Sept. 30. The extension was agreed upon to allow additional time for Network Solutions, the DOC and ICANN to finalize their agreement.

"While there have been several extensions to date of the testbed period, Network Solutions management communicated greater confidence that this would be the last extension," Birer said in a research note. "It should be noted that even if an agreement is signed, it could potentially go out for public comment for a period of 30 days or so."

Birer said he expects Network Solutions, which has registered more than 5.4 million domains, to meet or beat First Call's third-quarter earnings projections of 18 cents a share.

Last quarter, Network Solutions hurdled Street estimates, earning $5.8 million, or 17 cents a share, on record sales of $47.5 million.

"We are confident that Network Solutions is on track to achieve or exceed our revenue estimates for the quarter," Birer said. "We continue to believe that investors have been waiting on the sidelines to see how the NSOL/DOC/ICANN agreement will be worked out. We encourage investors to take advantage of the uncertainty to build or add to positions."

Network Solutions shares closed up 2 5/16 to 67 13/16 Monday.

The stock peaked at 153 3/4 in March, just ahead of its 2-for-1 split. It fell to a 52-week low of 13 11/16 in October.