Some portfolio managers at

plaNET.wall.street

had the jitters Wednesday. And they had venture capitalists to blame for it.

Two different buy-siders, each heavily invested in Internet stocks, separately confessed that they were troubled by some of the comments made in an Internet venture capital panel Tuesday evening.

Both were shocked by an estimate by Danny Rimer, former

H&Q

analyst and now partner at

The Barksdale Group

, that $500 million to $1 billion a day is flowing into companies associated in one way or another with the Internet. That's a staggering, a flabbergasting amount of money, they say -- more money than the market can rationally absorb.

Moreover, one of the fund managers -- who, like the other, spoke on condition of anonymity -- expressed concern over the VCs' comments that many executives coming into start-ups were getting a piece of the company without having to take the traditional sacrifice of a cut in salary -- a riskless proposition. When a venture is perceived as having no risk, the manager said, that's when bad things happen in the market.

Mark Gorenberg, a partner at

Hummer Winblad Venture Partners

, says he isn't worried about the amount of money in the VC market. (Hummer Winblad, by the way, is investing as much in a week as it used to invest in a year.)

What's of concern to him is the huge uptick in the number of companies that got VC financing in 1999. That means, he says, that in every small marketplace, more companies are being funded to battle one another. "It's going to make it much harder for the companies that aren't in the top two or top three of each sector," Gorenberg said.

plaNET.wall.street also saw an unusual addition to the usual suspects who show up at conferences like these. Along with the roster of portfolio managers, bankers and analysts, one of the attendees was, believe it or not, an anthropologist.

What's an anthropologist, a student of cultural behavior, doing lurking around an Internet investment conference?

Ed Andrus, adjunct professor of anthropology at nearby

Brigham Young University

, spent most of his time asking Internet executives if they had any internship opportunities for his students. (The big projects they're working on right now are Web sites that educate Americans relocating to China about Chinese culture, and Chinese coming to the U.S. about American culture.)

But Andrus, when asked, couldn't resist making a comment on the anthropology of investment conferences. It's actually something special, he says; after all, it's a place where

Yahoo!

(YHOO)

CEO

Tim Koogle

will take 15 minutes to chat with a professor, when Andrus would have zero chance to get a piece of Koogle's time under normal circumstances. An investment conference "brings all these strangers together," Andrus says, "and in a sense makes us fellow citizens."

Cox Interactive Needs Long Haul

There may be money to be made in the local Internet advertising market, but even in the best-case scenario, it won't be the easy kind.

That's the takeaway from the

plaNET.wall.street

presentation made by

Cox Interactive Media

, the online subsidiary of privately-held cable/broadcast/newspaper media conglomerate

Cox Enterprises

.

By its disciple's account, the local Internet advertising market should be huge. After all, the numbers kicked around for traditional media like TV and newspapers indicate that a clear majority of advertising is local. And most consumer buying takes place close to home.

But making a business out of the opportunity isn't happening overnight. CIMedia officially launched three years ago, but the venture -- which operates more than two dozen city sites across the U.S. and is due for further expansion -- isn't scheduled to break even until the fourth quarter of 2003, nearly four years away. The operation, which had $7.2 million in revenue in 1998 and $16.2 million in 1999, is aiming for sales of $37.6 million in 2000, according to President Peter Winter.

Until recently, CIMedia has kept a low profile.

"Not a lot of people know about us," Winter says. That seems unlikely to continue, given the publicly-traded status of other Cox Enterprises subsidiaries such as cable operator

Cox Communications

(COX)

and broadcaster

Cox Radio

(CXR)

. "Our radio company is public. Our cable company is public," says Winter. "If we continue to show good, strong traction in our core metrics, it's probable we'll go public."

One secret to building a successful local site network, says Winter, is finding the appropriate balance between local operations -- which are expensive but necessary to make the site useful in each city -- with efficiencies that can be spread out across the multicity network. Neither of CIMedia's most visible competitors --

America Online's

(AOL)

Digital City

and

Ticketmaster Online-CitySearch

(TMCS)

-- has gotten the balance right, he contends.

Another key to success, he says, is advertising. The big money, he says, is in more in-depth relationships, sponsorships, and co-branded products from three types of businesses: automotive, health care, and financial services. "We do not sell banners to small businesses. That's certain death," Winter says.