With Excite being snatched up Tuesday by At Home for a whopping US$6.7 billion -- the largest-ever acquisition of an Internet outfit -- it isn't taking much brainwork on the part of investors to figure out the next likely acquisition target.
If you said Lycos (LCOS) -- bingo. The portal (and soon-to-be parent of Wired News) immediately jumped to the head of the buyout line as the rumored possibility of an Excite-Lycos merger vanished. Lycos' stock surged 24 percent to $109.
The broader market was mixed in mid-afternoon trading. The Dow Jones Industrial Average shed 103.50 points to 9237.05, and the S&P 500 was 5.65 lower at 1237.61. The Nasdaq Composite Index rose 26.38 to 2374.58, and the Wired Index was up 4.99 at 610.02.
Most Internet stocks received a boost from news of the At Home-Excite tie-up. Not least among the encouraging aspects of the deal is that neither company has yet to make a dime -- validation for all those who think that profit is hardly a factor in valuing Net firms. The sale price represents a huge premium over Excite's (XCIT) $3.5 billion market value on Friday, which easily explains why the company's stock vaulted 58 percent to $106.50.
At Home (ATHM) jumped $9.75 to $111.75, but AT&T (T) may be the real winner here. When it completes its purchase of Tele-Communications Inc., it will become At Home's largest shareholder, and will find its Internet resources significantly expanded. The telco was up $4.38 at $88.63.
So now the speculation turns to who's next.
"The two main portals that haven't yet picked dance partners are Yahoo and Lycos," said Shaun Andrikopoulos, an analyst with BT Alex. Brown. "Yahoo has achieved critical mass and doesn't need a partner. But Lycos could really use a relationship with a larger company."
The most likely suitors? Andrikopoulos said it's still too early to test the prevailing winds, but he wouldn't be surprised to see offers from Time Warner or News Corp.
Snap unveiled an accord with GTE and Bell Atlantic for the two telcos to offer a high-speed version of its own portal for users with bandwidth to spare. Snap's majority owner, CNET (CNET), jumped 13 percent to $82.50. CNET also owns News.com, which competes with Wired News.
Yahoo (YHOO) advanced $4.56 to $321.56, and Infoseek (SEEK) was $3.69 higher at $75.06. Among other Net notables, Amazon.com (AMZN) slid $2 to $138.38, and MarketWatch.com (MKTW), which skyrocketed more than 470 percent on its first trading day last Friday, lost $2 to $95.50.
EBay (EBAY) was up $3.13 at $226.50. But one of its growing army of rival auction houses, Onsale (ONSL), fell $5.88 to $52.56 after warning that its fourth-quarter loss may be as high as 17 cents a share. This would only be about a penny more than anticipated by the Street, but would nevertheless be perceived as a setback in light of all the attention online auctioneers have received of late.
Microsoft (MSFT) will post its own quarterly earnings after the closing bell. Analysts are "officially" looking for the software giant to come through with profit of 59 cents a share, but the unofficial number is at least a few cents higher. Microsoft climbed $4.13 to $153.88.
International Business Machines (IBM) rose $2.38 to $187.31 as Morgan Stanley Dean Witter reiterated a "strong buy" rating for the company's stock. Intel (INTC) advanced $1.56 to $136.94, and Cisco Systems (CSCO) was $2.63 higher at $104.31.
Charles Schwab (SCH) gained 19 cents to $59.94 after reporting record quarterly profit of 26 cents a share. Much of that take came from about 93,000 online trades each and every day, accounting for 61 percent of Schwab's trading total.
Elsewhere in finance, Chase Manhattan Bank (CMB), JP Morgan (JPM), Merrill Lynch (MER), PaineWebber (PWJ) and Bear Stearns (BSC) each reported better-than-expected quarterly earnings, but their stocks were mixed amid uncertain outlooks for overseas economies. BankAmerica (BAC), meanwhile, fell $1.63 to $62.94 after its profit came in a couple of pennies shy of the anticipated mark.
