Media Metrix, Terayon, 3DO and Intertan

Media Metrix's IPO looks promising; Terayon faces a tsunami of opportunity; 3DO's 'reinvention' may cause a turnaround; Intertan shouldn't face any near-term price erosion.
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A selection of some of the most intriguing tech stock ideas on the Web. The items presented do not represent the views of TheStreet.com; rather, the collection is offered as a service to our members who may be scanning the Web for stock-related information.

Media Metrix

Chris Nerney

(3/1)

Media Metrix

, which has announced an initial public offering (to trade on the Nasdaq exchange under the symbol MMXI), has a head start over the dominant

A.C. Nielsen

on the Web, and stands a "legitimate chance" of fending off the 800-pound gorilla of the audience-measurement industry, says Chris Nerney, a senior analyst at

internetnews.com

.

Media Metrix started rating Web sites in 1996, delivering the first independent statistics on popular Internet sites. This will make it tough for Nielsen, which is moving into cyberspace via a relationship with

NetRatings

, Metrix's only rival, says Nerney. Media Metrix makes money by selling annual subscriptions to its measurement products and services. It has a customer base of 300 subscribers and a retention rate of 95% of its clients with annual contracts. The targeted amount for the IPO is $48.3 million.

Media Metrix has become the clear leader of independent providers of site data. The company must continue increasing its revenue. But already advertisers are getting more confident about Web possibilities, and that can only help Media Metrix. "Nielsen will have its work cut out to overtake Media Metrix," says Nerney.

More information can be found at:

www.internetnews.com

Terayon Communications Systems

Online Investor

(2/26)

Cable Internet access looks to be the front-runner for providing high-bandwidth Internet access to homes. And

Terayon Communications Systems

(TERN)

, which makes cable modem and broadband cable infrastructure equipment, has certainly benefited from that perception, says

Online Investor

. Its stock rocketed from a low of 7 to a high of 50 1/8 in the space of a few months as investors saw the company as a cheap Internet play. It has fallen below 30 since a secondary offering in January increased shares outstanding by 20%.

Still, Terayon appears to be "parked in front of a potential tidal wave of market opportunity," says

Online Investor

. Broadband communications needs cable modems and a cable company's control-center equipment, which Terayon offers. The company does depend on the cable companies to upgrade its own systems to the proper two-way cables and other infrastructure, but the bulk of those upgrades should be completed in two years. By then, Terayon's installed base of 485 head-end units (in cable companies' control centers) means 5.7 million homes will need its cable modems.

BT Alex. Brown

estimates that the current head-end base portends the delivery of 420,000 modems. That's good growth, compared with the 61,000 units sold in 1998.

In the next year, Terayon's job is to get past its red-ink stage. The company lost $23 million on revenue of $32 million in 1998. And it is anticipating a net loss of $18.6 million in 1999. There's a potential for profit in 2000.

More information can be found at:

fnews.yahoo.com

3DO

George Putnam

(3/2)

3DO

(THDO)

went public in 1993 after the release of its 32-bit CD-ROM video game player, a system that, despite high hopes for success, ultimately failed to catch on with gaming enthusiasts. Founder Trip Hawkins has reinvented the company as a software game publisher, and it looks like the plan might work this time, says turnaround guru George Putnam of

The Turnaround Letter

.

Like other technology companies, 3DO is losing money. But its software publishing revenue is steadily climbing: from $9 million for the fiscal year ended in March 1998 to $25 million for the nine months ended Dec. 31, 1998. The number of titles shipped by 3DO is expected to increase to 15 by the end of March from three last year. Considering that the life span of video games is very short, it is important to have a strong development pipeline. 3DO should have 20 to 25 games ready for next year.

Financially, 3DO is doing well, says Putnam. The company is not in debt, and it has $12 million in cash and two $20 million lines of credit. Putnam says the company could be profitable in 2000. "While there is no guarantee that 3DO will successfully navigate the lucrative but tricky game market, we think it has the potential to be a big winner," says Putnam. This stock is a buy up to 7, he says. It traded recently around 4 1/ 2.

More information can be found at:

www.investools.com

Intertan

Paul Ciampoli

(3/1)

Executives of

Intertan

(ITN)

have been buying stock in the Fort Worth consumer-electronics retailer even as it hovered near 52-week highs, sending strong signals "they don't expect to see any near-term price erosion," says Paul Ciampoli of

Federal Filings

.

Spun off from

Tandy

(TAN) - Get Report

in 1986, Intertan maintains about 1,150 retail stores and dealer outlets in Canada and Australia. The stores carry both private-label and brand-name consumer-electronics products. Since 1986, the company has posted losses on a yearly basis, though the 1988 loss of $12.77 million included $15 million in restructuring charges.

Intertan's directors have done well with the combined 79,500 shares they bought at prices ranging from 7 3/4 to 8 1/2 each. Shares traded this week at 9 3/8.

More information can be found at:

www.tfc.com