Yahoo! Slips, but Net Sector Stays Giddy

Digital Island, Internet Capital Group and Exodus were among today's big gainers.
Publish date:

Some sense of sanity returned to Yahoo! (YHOO) today, but the same cannot be said for some other stocks in the Internet sector.

Yahoo! gave back 28 3/8 points of the 119 points it had added since news last week that it would be included in the

Standard & Poor's 500

, closing at 319 5/8. But even with Yahoo!'s losses, Internet Sector

index managed a gain of 13.40, or 1.3%, to 1072.27.

Action in

Digital Island


certainly suggested that not all of the craziness in the sector was gone even though Yahoo! took a step back. The Internet services company closed up 45 5/16, or 65%, at 114 15/16 on news of a partnership with

Sun Microsystems

(SUNW) - Get Report




. The partnership is designed to accelerate Web site performance for consumers and e-business Web sites. Digital Island will deploy up to 5,000 Sun servers equipped with Inktomi software to expand the reach of Digital Island's content delivery network. Inktomi finished up 4 5/16, or 2.6%, at 168, while Sun ended up 6 3/8, or 8.8%, at 78 7/16.

Internet Capital Group


closed up 43 5/16, or 25.5%, at 213 5/16.

The Philadelphia Enquirer

reported that ICG would be receiving a $50 million investment from


(T) - Get Report

and $40 million from a Kuwaiti investment company,

Internet Assets

, according to a filing with the

Securities and Exchange Commission


For a couple more 40-plus point gainers, head on over to IPOland, where Internet madness is in need of a lobotomy.


, an Internet consulting and advertising company, closed up 50, or 192%, at 76. Also,


, a provider of online tools for software and Web site developers, finished up 45 3/8, or 252%, at 63 3/8.

Also showing signs of giddiness was

Exodus Communications


, which closed up 21 1/16, or 14.6%, at 165 9/16 after

Merrill Lynch

initiated coverage of the Web hosting company with a buy rating and a 200 price target. He forecast that the Web hosting and content delivery markets should create over $70 billion in market cap by 2003, with Internet pure plays accounting for about $30 billion.

It also was an interesting day for


, which closed down 12 9/16, or 8%, at 142 1/16, though it could have been worse considering that the lock-up of approximately 11.8 million shares was lifted today.

In addition,





(MSFT) - Get Report

announced a strategic pact to develop and market end-to-end solutions for the wireless Internet. The companies will form a joint company to market and deliver mobile email solutions for network operators.


took a look at the deal in an earlier


Following news of the Microsoft/Ericsson deal,

Credit Suisse First Boston

, an underwriter for, reiterated a strong buy on the stock, saying the announcement "further substantiates our view that the mobile Internet is going to be much bigger than anyone predicted," and that has "a substantial lead in penetrating the WAP (Wireless Application Protocol) market."