Talk of a couple of high-profile mergers and alliances was not providing much of a lift for the Internet sector.
TheStreet.com Internet Sector
index was down 32.73, or 2.8%, to 1143.38 in early trading, due in part to weakness in both
, both of which reportedly had been in talks for separate high-profile deals. Yahoo! was down 9 3/16, or 6%, to 156, while eBay was off 6 3/16, or 4%, to 144 5/8.
TheStreet.com New Tech 30 was down 12.55, or 1.60%, to 769.56 as Net stocks were being dragged lower along with the rest of the tech sector.
New York Times
reported that Yahoo! was in talks with
about an alliance to counter the recent merger between
. News Corp. was up 1 3/4, or 3%, to 56 7/8.
The article actually refers to a report from the
that the alliance would provide Yahoo! with access to the
Fox News Channel
and News Corporation-owned newspapers like the
Times of London
The New York Post
. In return, News Corp. would use its satellite networks to deliver Internet services to consumers along with its current television programming.
eBay, meanwhile, decided against putting its own bid out for
according to CNBC. The bid would likely have topped all offers at $1.6 billion, reported Sunday's
, which provided the initial report of the possible deal. The
has been investigating price-fixing allegations involving Sotheby's and rival
. Also, the two auction houses face dozens of civil lawsuits accusing them of collusion. Last week, two key execs at Sotheby's resigned. Sotheby's was up 5 3/8, or 28%, to 24 7/8 on the news. ebay was recently down 2 13/16, or 25, to 148 after trading as low as 142 7/8.
U.S. Bancorp Piper Jaffray
addressed some of Sotheby's problems in a research note today. "Although we view the addition of a credible high-end auction procurement mechanism in the form of Sotheby's as a significant positive for eBay, we urge investors to approach this situation with caution, given the circumstances surrounding antitrust actions and business ownership," wrote analyst Gregory Konezny. Konezny has a 12-month price target of $160 on eBay, and with its current price near that valuation, he recommended eBay shares for "long-term-oriented investors."
AOL was moving on a couple of factors. The company said that its Instant Messenger service will be offered on
mobile phones. Also,
jumped on the bandwagon of analysts pushing AOL's stock, putting out a note reiterating a strong buy rating on the company with a $115 price target. The report follows bullish notes from both
Credit Suisse First Boston
last week. Analyst Michael Graham wrote that it appeared as if AOL's stock had bottomed.
Research in Motion
was up 19 1/16, or 13%, to 158 after the company said that AOL would use its services as a part of its AOL Mobile Messenger service and e-mail services. Research in Motion also will team with
to provide services for wireless email.
One merger that was past the talking stage was
, which said it would acquire
in an all-stock deal valued at $290 million. Quintus was down 6, or 12%, to 42 1/4, while Mustang.com was up 3 7/16, or 13%, to 29 1/2.
Under terms of the deal, Quintus will exchange 0.793 share of Quintus common stock for each outstanding share of Mustang.com common stock. Quintus is a provider of e-customer relationship management solutions, while Mustang.com is a provider of e-mail management products.
was getting a lift from a note put out by
raising revenue estimates on the online brokerage service. It was up 1, or 4.5%, to 23 1/4. Chase H&Q raised revenue estimates for E*Trade's current quarter to $326 million from $256 million, while also upping estimates for the quarter to an 18-cent loss from the 21-cent loss estimated previously. Analyst Gregory Smith wrote that E*Trade's stock price "has become disconnected from the underlying fundamentals, creating an excellent buying opportunity." Chase H&Q has done underwriting for E*Trade.