Net Sector Inches Higher as Greenspan Speaks

Meanwhile, DoubleClick drops on news of informal investigations into the company's data-collection policies.
Author:
Publish date:

Concerns that the

Federal Reserve

will remain aggressive in raising interest rates helped reverse an early run-up in Internet and technology stocks today. After absorbing

Greenspan's

comments before the House Banking Committee, however, the Net sector was lately inching up.

TheStreet.com Internet Sector

index was up 3.85, or 0.3%, at 1130.36 after trading as high as 1143.91 earlier in the session.

TheStreet.com New Tech 30 was up 13.18, or 1.9%, at 722.02.

Greenspan's speech was of little interest to shareholders of

DoubleClick

(DCLK)

. The stock dropped sharply on news late Wednesday that the

Federal Trade Commission

and the New York Attorney General's office had launched informal investigations into DoubleClick's data-collection policies with regards to privacy rights. DoubleClick was off 12 1/8, or 11%, at 94 3/8 in early trade.

The investigations stem from DoubleClick's practice of tracking Web surfers. On Monday, DoubleClick took the offensive, announcing a plan to deal with the online privacy issues of consumers. Today, however, DoubleClick responded to the inquiries, saying that it has never used, nor will it ever use sensitive data in its profiles.

TSC's

George Mannes

looked beyond the headlines in a

piece that ran last night.

Credit Suisse First Boston

analyst Richard Peterson defended DoubleClick in a note today, writing that weakness in the stock was a buying opportunity for long-term investors.

"Our view remains that DoubleClick's data collection and ad serving practices are consistent with best business practices on and off the Internet, and are significantly more conservative than the practices of many data marketing and direct marketing companies," Peterson wrote. "We are confident that DoubleClick will be able to execute its business plan without significant interference from government regulation or legislation, and that DoubleClick will be able to harness the power of the Abacus Direct database."

Credite Suisse First Boston also came to the defense of

Engage Technologies

(ENGA)

, which dropped sharply yesterday in sympathy with DoubleClick. Petersen wrote that Engage, which operates a leading platform that uses anonymous profiles to deliver highly targeted advertising and e-commerce offers on the Internet, does not collect "personally identifiable information," which has been the focus of the inquiries. He indicated that Engage's Internet ad-targeting system provides similar functionality and operates with equal effectiveness to ad targeting systems that use personally identifiable information, with none of the privacy concerns. CS First Boston has done underwriting for DoubleClick and Engage Technologies.

In recent trading, Engage was up 4 15/16, or 5%, at 111 15/16 erasing a portion of yesterday's 14-point loss.

24/7 Media

(TFSM)

, which dropped around 8 points yesterday, was up 4 9/16, or 10%, at 49 5/8

Elsewhere,

eToys

(ETYS)

, one of the beleaguered e-commerce plays, finally found a friend in

Salomon Smith Barney

, which initiated coverage of the online toy store with an outperform rating and a price target of 20. Analysts wrote that the stock was "very attractive" trading 83% off its high. However, analysts also noted that the stock has been hurt by the lockup expiration of around 95 million shares. They estimate that at least 15 million have been sold since November, and wrote that "this overhang may continue as the remaining shares are absorbed in the market." eToys was up 1 3/8, or 10%, at 15 in early trading.

Also benefiting from an analyst's call was

CNet

(CNET) - Get Report

, which was moved to the

Goldman Sachs

recommended list from market outperformer. It was up 1 13/32, or 2%, at 62 13/32. After a meeting with CNet management, analyst Tonia Pankopf wrote that "we do not believe the market fully appreciates the role that CNet plays and the high margin revenue opportunities the company is positioned to capture as a B2B and B2C enabler of technology transactions."