Mergers Can't Spark Net Sector in a Nervous Market

Separate deals involving CDnow, DoubleClick, NetGravity, Excite@Home and iMall are sending all their stocks down.
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SAN FRANCISCO -- Market jitters have overshadowed several Internet-related mergers and left the sector weak at the start of the session. Internet Sector

index was off 17.42, or 2.6%, at 641.37 early on. Weakness was stemming from losses in the broader market after sharp losses in Latin American equity markets, particularly Argentina.

Among today's Net deals,



said it was merging with

Columbia House

, the club-based direct marketer of music and videos, which is owned equally by


(SNE) - Get Report


Time Warner


. Sony and Time Warner will each own 37% of the new public company resulting from the get-together. CDnow's existing shareholders will own the remaining 26%.

Separately, CDnow said it expects its loss per share, excluding amortization of goodwill and other intangibles and one-time charges, to be narrower than the

First Call

consensus estimate of a loss of 83 cents a share. CDnow was off 2 15/16, or 13%, at 19 5/16 in early trading.




said it was buying



, a provider of online advertising and direct marketing software solutions, in a stock swap valued at $530 million. DoubleClick was off 2, or 2%, at 92 in early trading, while NetGravity was down 3, or 11%, at 24 1/2.



(ATHM) - Get Report

said today it had purchased Web retailing specialist



in a deal valued at around $425 million. Excite@Home will issue 8.3 million shares of stock for iMall. Excite@Home was off 1 5/8, or 3%, at 49 7/8 early in the session, while iMall was down 15/16, or 4%, at 21 3/8.

While other Net companies have chosen to grow by buying others,

(AMZN) - Get Report

continues to expand internally. The online retailer launched two new stores: Electronics

and Toys & Games

. In early trading, Amazon was off 1, or 1%, at 116 3/8.

Shares of



were lower for the second straight day. On Monday, the company filed for a public offering of 3.3 million common shares. Inktomi, which dropped 8 points on Monday, was off another 6, or 4.5%, at 126 early today.

On the IPO front,

(CHINA:Nasdaq), a portal that operates Web sites at




, will go public today. It was priced at $20 Monday.