Bellwethers AOL, Yahoo! Lead Net Sector Charge

But traditional Net plays aren't as fashionable as B2B; sustainability could be a problem.
Author:
Publish date:

Don't look now, but those rascally old veteran Internet bellwethers are finally showing some signs of life.

TheStreet.com Internet Sector

index, which includes many of the traditional Internet plays, was up a huge 65.56, or 6.04%, to 1150.46 in recent trading.

TheStreet.com New Tech 30 index, which includes some of the more "in" stocks in the sector, was up a strong 36.55, or 5.05%, to 760.07.

America Online

(AOL)

was leading the charge, up 6 1/8, after this morning's positive

note from

Merrill Lynch

. Also,

Yahoo!

(YHOO)

was up 11 1/16, or 7%, to 164 7/8;

eBay

(EBAY) - Get Report

, which also received some positive comments from Merrill, was up 13 3/4, or 10.4%, to 148 1/4.

Amazon.com

(AMZN) - Get Report

was up 5 5/16, or 8.4%, to 68 7/16. The company was involved in a couple of alliances with tech heavyweights

Oracle

(ORCL) - Get Report

and

Nextel Communications

(NXTL)

. Oracle announced the formation of

OracleMobile.com

, a consumer wireless Internet portal. Among the commerce sites teaming with Oracle were Amazon and eBay, along with

E*Trade

(EGRP)

. The OracleMobile.com service can be accessed from Web-enabled wireless devices, such as Web phones and two-way pagers. Also, Nextel's alliance with Amazon also offers wireless Internet applications for businesses through Nextel Online.

Also of note, some of the beleaguered e-tailers were on the mend.

priceline.com

(PCLN)

was up 2 3/4, or 5.5%, to 52 7/8;

eToys

(ETYS)

was up 1, or 6.8%, to 15 11/16; and

buy.com

(BUYX)

was up 1 3/4, or 12.7%, to 15 1/2.

Many of the more traditional Net plays have been hammered of late so the recovery likely caught some players short and has helped exaggerate the moves. But the traditional Net plays still are out of

favor compared to the more fashionable business-to-business plays so sustainability could be a problem and shorts could regain the upper hand. Nevertheless, there are still enough people who think AOL has been punished too much who will support the stock, while Yahoo! remains loved by all. (Has anyone taken to task those analysts who placed a 600 price target (300 post-split) on Yahoo!? FYI, the two firms were

First Union Securities

and

Schroder & Company

.)

Elsewhere,

Network Solutions

(NSOL)

is somewhat of a contemporary Net play, but often performs like a

B2B play. It was up 23 1/4, or 8.8%, to 286 7/16 today following some positive words from

Prudential Securities

, which has done underwriting for Network Solutions.

Analyst Paul Merenbloom wrote that a recent visit with management "further solidified our belief that shares of NSOL are (a) undervalued relative to our estimates for five-year growth; (b) underleveraged with regard to capitalization, and (c) have yet to reflect the immensely powerful business and operating model(s) that underlie the registrar and registry businesses, respectively."