Are , Amazon.com
, and America Online
the "has-beens" of the Internet?
No, but their stocks are being outpaced by a new wave of companies, such as Preview Travel (PTVL), SmartServe Online (SSOL), and General Magic (GMGC), at least this
year, according to a ranking of the largest gaining Internet stocks in 1998 compiled by Digital Video Investments. Some of the stocks are retreads (they're just now being marketed as Net stocks); others are unproven IPOs; others are profitable.
Digital Video Investments' list illustrates Wall Street's voracious appetite
for Net companies, despite their money-losing streaks and fiercely competitive markets.
"Absolutely nothing fazes them," David Simons, managing diector of Digital Video, said of the Net stocks. He warned, however, that such expansion often is "dangerous froth."
Companies that are morphing into Net companies, such
as Egghead Software (EGGS), also are
showing steep gains this year. Egghead is up 60 percent this year
alone--outpacing stocks such as Microsoft (MSFT) and Intel (INTC).
Some analysts see the gains as justified because of the Net's giant potential as the premier medium of the future, following print, television, and radio. But others are alarmed at the surge in Net stocks, one of the key drivers of the bull stock market.
The following are the top five appreciating stocks, according to Digital's list:
Preview Travel, up 330 percent; SmartServe Online, up 225 percent; SportsLine (SPLN), up 201 percent;
General Magic, up 200 percent; and Network
Solutions (NSOL), up 183 percent. Many analysts are asking: "Will the honeymoon last" for companies such as Network Solutions?
Rounding out the top ten performers on Digital's list are: Broadvision (BVSN), up 175 percent; Go2Net (GNET), up 147 percent; Infonautics (INFO), up 147 percent;
USWeb (USWB), up 136 percent; and IMall (IIML), up 136 percent.
AOL ranked 33rd on the list, Amazon was 34th, and Yahoo was 37th.
A look at some of the companies at the top of Digital's list:
• Preview Travel. Riding AOL's coattails, Preview Travel went public in November at $11 per share. It now is trading at about 32. The online travel service has cut a deal to be the primary ticketing service on the nation's largest online service. It also operates a cobranded service with Excite. The company remains unprofitable and competes against the likes of Microsoft, Travelocity, and airline travel booking sites.
• General Magic. Once in a deep slump, General Magic just received a big boost. Last month, Microsoft took a small stake in General Magic, and said it would license some of the company's technologies. Since then, GM's stock has
rebounded sharply. Previously, it had recruited Novell executive Steve Markman as chief executive to turn around the company.
• SmartServe Online. The company delivers real-time information and transaction services to subscribers. This week, the company said it expects
to add 250,000 subscribers during the next two years. SmartServe has struck deals with Nortel, Philips, and Cidco, among others.