AOL Shows Portals the Door to the Basement

Boy, does this market hate the portals. They are so out of favor that they languish day after day after day. Heck, I think Portal Software (PRSF) -- which is not a portal -- is getting hurt because it has portal in its name.

It all started with America Online's (AOL) buy of Time Warner (TWX), which is causing people each day to lose conviction in AOL as a business. Oh, you can say that's not true, but the one thing we know about this era is that stocks are a statement of confidence in the business plan and the execution.

It has infected Yahoo! (YHOO), which, even though it is doing quite well, can't get out of its own way.

Go (GO) anyone? That's a hideous billion-dollar loser for Disney (DIS). (Today Go felt a little like Staples.com (SPLS) didn't it?)

And could this Lycos (LCOS) be any uglier? (Yes.) It sliced right through the technical levels of support despite dangling its Lycos Europe offering -- a Palm (PALM) portal? -- in front of all. Don't forget the carnage in all of the other Go derivatives, like GoTo.com (GOTO) and Go2Net (GNET).

We haven't lost heart in these names. We still own Lycos and Yahoo! and AOL. We think the problems won't go away until AOL makes it clear that this strategy will allow it to grow faster than it would alone. And that is still not clear yet.

Because it isn't, we didn't add into the weakness today. In fact we discussed throwing the maiden into the volcano, which means throwing some of the positions away to please the gods of trading.

Maybe the fact that we didn't throw the maiden away bodes poorly for tomorrow. I know that a symbolic throw-in doesn't cut it.

Look out volcano, we may have to pay you a visit tomorrow.

Random musings: Don't forget to tune into my chat at 5 tonight on America Online. No questions turned back, except, of course, about extremely small-cap stocks that have no place in the chat!