Undeterred by Fed, Net Sector Rises and Shines

Media Metrix releases its figures, and the stock-split frenzy continues.
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It doesn't look as if even Alan Greenspan could be the Grinch who stole Christmas from the Internet sector. Boosted by a slew of news items, Net stocks were on the rise as the Federal Reserve met to determine whether to raise interest rates.

TheStreet.com Internet Sector

index was up 22.22, or 2.0%, at 1120.97 in early trading. The Fed is not expected to raise interest rates after its meeting, though there is speculation that policymakers could change their bias toward a tightening.

Media Metrix

numbers for November were released today, though they have been somewhat overshadowed by more recent data that continue to suggest strong holiday sales. Media Metrix reported that unique users rose to 64.6 million in November vs. 63.8 million in October. Frequency actually fell to 12.4 days per month vs. 12.6 days per month in October, while duration rose to an all-time high of 8.3 hours per month vs. 8.1 hours.

The top 10 Web properties were largely unchanged, although

America Online

(AOL)

posted a 2.8% increase in reach, while

Yahoo!

(YHOO)

showed a 3.0% increase in reach.

Amazon

(AMZN) - Get Report

overtook

Excite@Home

(ATHM) - Get Report

for the No. 6 spot with a 23.8% reach, compared with 23.2% for Excite@Home. And

eBay

(EBAY) - Get Report

remained the top spot in terms of average minutes per user (94) and average page views per user (97) per month.

In early trading, AOL was up 1, or 1.2%, at 87 1/4; Yahoo! was up 6 1/2, or 1.8%, at 366; Excite@Home was up 1 1/8, or 2.4%, at 47 3/8; and eBay was up 15/16, or 0.6%, at 150.

BlueMountain.com

, the online greeting card Web site that was recently purchased by Excite@Home, saw an increase in traffic to 19.7% from 17.2% in October.

RealNetworks

(RNWK) - Get Report

also showed an increase in reach to 16.8% in November vs. 15% in October, good enough for the 12th slot. Also among the better movers was

About.com

(BOUT) - Get Report

, which climbed to the 11th slot with a 17.1% reach from the 17th slot and a 13.1% reach in October. RealNetworks was up 4 13/16, or 3.3%, at 151 1/4, while About.com was up 4 5/8, or 6.9%, at 71 3/8.

priceline.com

(PCLN)

was up 1 15/16, or 3.5%, at 57 15/16. The move came despite action by

Microsoft's

(MSFT) - Get Report

Expedia

(EXPE) - Get Report

unit seeking to dismiss priceline's patent infringement lawsuit. priceline has contended that Expedia's Flight and Hotel Price Matcher service, which allows customers to specify their own price for airline tickets and hotel rooms, infringes upon its patent.

Lawyers for Microsoft and Expedia cited priceline's failure to include

Marketel International

in the case as reason for the dismissal. In January, Marketel sued priceline over the patent, claiming ownership and questioning priceline's rights to the patent. Expedia/Microsoft is looking to resolve the question over whether priceline has ownership of the disputed patent. Expedia was up 1 5/8, or 4.2%, at 40 3/4 in early trading.

Split mania continued. Online advertising network

DoubleClick

(DCLK)

said it was splitting 2 for 1. The split will be payable Jan. 10 for shareholders of record Dec. 31. DoubleClick was up 13 11/16, or 6.8%, at 215 1/16.

Also,

Portal Software

(PRSF)

was up 4 15/16, or 4.5%, at 114 7/16 after it set a 2-for-1 stock split payable Jan. 19 to shareholders of record Dec. 31. In addition,

Morgan Stanley Dean Witter

began coverage of Portal Software with an outperform rating and a 150 price target. Analyst Yumi Koh wrote that Portal was the "leading billing and customer care company dedicated to the Internet/data markets." Morgan has not done underwriting for Portal.

Clarus

(CLRS)

was up 3 3/4, or 8.5%, at 47 3/4 after the business-to-business e-commerce company said after the close Monday that it would meet or beat analysts' projections for its fourth quarter and that its outlook for 2000 was "favorable" as well. Clarus is expected to report a loss of 62 cents a share, according to

First Call/Thomson Financial

.

CheckFree Holdings

(CKFR)

was off 9/16, or 0.6%, at 88 3/4 after the provider of electronic billing and payments said it would acquire

BlueGill Technologies

, a provider of Internet billing and statement-creation software applications. According to the companies, the merger attempts to simplify the process of selecting and deploying an electronic bill payment solution. CheckFree will exchange approximately 3.2 million shares of CheckFree stock for all outstanding BlueGill stock, based on a valuation of $250 million.

CMGI

(CMGI)

was up 16 13/16, or 7.6%, at 239 after

Merrill Lynch

initiated coverage of the Internet holding company with near-term accumulate and long-term buy ratings and a 12- to 18-month price target of 300. Analyst Henry Blodget said the stock was a "core holding in our Internet portfolio."

"Bottom line," Blodget wrote, "CMGI is long the Internet. As long as the public market for Internet stocks does well, CMGI probably will, too."

Also moving after action by a research firm was

CNET

(CNET) - Get Report

. The stock was off 3 3/8, or 4.6%, at 70 5/8 after

First Union Securities

lowered its rating on the stock to a buy from strong buy based on valuation. Analyst Carolyn Luther Trabuco wrote that the stock recently exceeded her price target of 69, that current business "looks OK" and that Media Metrix numbers from November were "softer than we would have liked." CNET dropped to the 15th most visited site with a 14.5% reach compared with the 13th slot and a 15% reach in October. First Union has not done underwriting for CNET.

"We believe the underlying business fundamentals are sound, however, at this point, we do not anticipate significant upside in the Q4 '99 results," Trabuco wrote.

Juno Online

(JWEB)

was among the leading point-gainers, up 22 5/8, or 69%, at 55 3/8. The online service provider said yesterday that it would cut the cost of full Internet access to $9.95 per month from $19.95 and would begin to offer free Internet service to subscribers who agree to view advertisements.

PaineWebber

reiterated a buy rating on the stock and doubled its 12-month price target to 120 from 60.

"While it has yet to be proven that the free ISP business model in the U.S. could be a profitable business model, we believe Juno may be best positioned to do just that over time, given its very efficient online/offline model (which no competitor offers), scale and network architecture," wrote analyst James Preissler. PaineWebber has done underwriting for Juno.