The Internet is breathing new life into Netscape's stock.
Downtrodden for months--recording disappointing earnings and its first layoffs in history in January--Netscape's stock is starting to bounce back.
The shares were trading at 25.63, up .8750, in midmorning trading. Netscape stock has traded as low as 14.88 and as high as 49.5 during the past 52 weeks. Just two weeks ago, it was trading as low as 17.
"You've seen K-Tel and some of the others," said Paine Webber analyst James Preissler, referring to the phenomenal run-up in the music company's stock since it announced plans to sell records via the Web starting May 1. "In Netscape, there's at least some definable value [in the Internet business]. The business already exists."
Added Lehman Brothers analyst Michael Stanek: "It's bounced on the Internet stuff."
As reported, Netscape said yesterday it would begin offering free email and its own branded search engine as part of a plan to beef up its Web site. It what is being dubbed "Project 60," Netscape will add these features to NetCenter during the next 60 days.
Netscape says Netcenter gets about 24.4 million visitors per month, thanks largely to its position as the dominant browser provider. Navigator has about 70 million users, and 50 percent of them use Netscape as their home page, the company says.
According to a recent regulatory filing, Netscape's Web site revenue stood at $95 million last year, 1.5 times larger than Yahoo's. This accounted for nearly 18 percent of the company's total sales last year.
But analysts wonder if the stock can be buoyed up by the Net alone. Netscape hasn't said when it expects to return to profitability.
The analysts also say the company faces intense competition in the Web site market. As Stanek put it: "It's a little late to the party." Some Internet stocks, he noted, are starting to cool off.
Despite the improvements with NetCenter, "there's no guarantee of success," Preissler added.