SAN FRANCISCO -- Microsoft (MSFT) - Get Report appears ready to hop on the dot-com stock bandwagon.

A report in

The Wall Street Journal

today indicated that Microsoft is moving closer to creating a tracking stock for its Internet businesses. The article quotes an analyst estimating Microsoft Internet businesses as having revenue between $800 million and $1 billion, giving the stock a potential value of $50 billion if it trades at a multiple of 50 times revenue, as many Net issues presently do.

The market value of Microsoft currently is around $482 billion.

TSC's

James Cramer

examined Microsoft Chairman

Bill Gates'

policy reversal on the Net "craze" in a

piece this morning. Microsoft was up 2 5/8, or 3%, at 97 in early trading.

CNet

(CNET) - Get Report

, which bested earnings expectations after the close on Thursday, was slightly firmer early today. CNet reported pro-forma net income of 7 cents a share for its second quarter, 2 cents better than the

First Call

estimate of 5 cents a share.

Hambrecht & Quist

, which has done underwriting for CNet, reiterated its buy rating on the stock, saying the company "is well on its way to becoming the de facto online marketplace for buyers and sellers of technology, to the point where it will become a virtual necessity for technology vendors to advertise on CNet." CNet was up 5/16, or 1%, at 52 3/16.

Also on the earnings front,

Charles Schwab

(SCH)

, something of an Internet play as the largest online broker, this morning reported earnings of 18 cents a share for its second quarter, a penny better than the First Call estimate. Revenue was a record $982 million. The company said that, by the end of the quarter, it had 2.8 million active online accounts, with $251 billion in assets, up 56% and 96%, respectively, from last year. Online trades accounted for 67% of all trades during the second quarter.

In early trading, Schwab was down 2 1/4, or 4%, at 53 1/8. Losses may be stemming from comments by the company that it expects its profit margin in the second half of 1999 "to move back toward the levels we've achieved in recent years," due to the recent rate hike by the

Federal Reserve

and its "ongoing investments in people, technology and our brand."

Business Week's

latest Inside Wall Street column praises two Internet plays, and both are moving this morning.

Columnist Gene Marcial writes that

Corsair Capital Partners'

Jay Petschek thinks corporate travel management concern

Navigant International

(FLYR)

will spin off its Internet business and take it public. Petschek, who has accumulated nearly 5% of Navigant shares, believes Navigant is in discussions to form alliances with several Internet portal companies, the column says. Navigant was lately up 13/16, or 9%, at 9 3/4.

Also,

CyberSource

(CYBS)

, which processes Internet transactions for online merchants and just went public last month, was cited in the column as a possible buyout target. It was up 6 11/16, or 20%, at 40 early on.

On the IPO front, there are two stocks to watch today:

Paradyne Networks

(PDYN)

, a DSL equipment provider which was priced at $17 on Thursday, and

Audible

(ADBL)

, which offers spoken audio of books, newspapers and magazines on its Web site and was priced at $9 Thursday night.