Internet Investment Analyst

NBCi presents

July 21, 1999

Internet Investment Analyst Steve Harmon answers questions about how to choose the best internet stocks.

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CNBC: Welcome to CNBC.com's MoneyTalk Live! Our guest today is Internet Investment Analyst Steve Harmon, a frequent commentator on the web and guest on CNBC. Harmon created the ISDEX, Internet Stock Index, and was Senior Investment Analyst for Jupiter Communications in 1995-96. In December 1995 he authored a comprehensive databook that forecasted five years of Internet growth in such areas as e-commerce, e-music, broadband cable, Internet, content, software and hardware among others. Before Jupiter, Steve was with Paul Kagan Associates.

Usvtcom: Are the pick and shovel companies of the Internet simpily not recognized by the street? For example, why hasn't USWeb performed as a stock?

Steve Harmon: I think it depends on which pick and shovels you are talking about. There are new ones coming out, with Juniper, Digital Island.I think USWeb is still a great tool, and I expect it to perform longer range.

Carl Is Dreamy: Any long term negative from yesterday's sell-off in internet companies?

Steve Harmon: Long term negative? That's about three weeks on the Internet. I think it was a market-sector selloff, not Internet-specific selloff. If it had just been the Net stocks, that would have been different. And they're back today.

Ttt123456: Steve, do you predict the internet IPOs to cool off or do you think there will comeback for the hot IPOs?

Steve Harmon: I think IPOs are getting all the attention, and I expect them to continue to be hot, at least for the foreseeable future. As we know, though, that can change on a dime.

Deeper: where do you see the industry going? what do you think is the next "big thing" in terms of technology?

Steve Harmon: If we have about three weeks, I can give you an answer! I think hybrid TV/Web will be huge next year, and in terms of technology, broadband is the next big thing. Anything faster than the current snail pace Internet today, including DSL and cable Internet.

Moonie-2: What do you think of Global Crossing? It has languished at its current price range. Is it a buy or a sell?

Steve Harmon: They were involved with a merger, and I think they have pretty big ambitions as a company. What I like about them is they are very aggressive, and they are trying to do this deal with Frontier Corporation (FRO). I think Global is clearly taking on broadband, fiber optics. It's more of a wait-and-see stock, to see if they can pull it off.

Bk: Hi Steve, what do you think of Excite@Home? They seem to be dominating the cable modem field.

Steve Harmon: They are more than seemingly doing it, they ARE dominating it. I think Excite@Home has to show us the money as a result of the merger, in a practical way. I don't think they have done that. I also think that it needs to be much more rapid/rabid. How many of us can get "Excited" at home? Very few. Deploy, deploy, deploy.

Jo Jo: what is your view on the potential of online health care companies such as Dr. Koop, Heltheon, MedEra Life Sciences?

Steve Harmon: I think investors have been chasing these like ambulances, waiting to see what comes off the stretcher. Healtheon I think is the smartest in its moves, and is trying to consolidate the sector. A lot of these stocks are more hype or hope than happening. I like to see it on Main Street, buy it on Wall Street. How many of us are using them? My guess is not a lot. Get to the real practical and daily experience with consumers, and then you have a better business. We aren't talking about them like eBay and AOL. The segment is a no-brainer, but make it a more practical, daily experience.

19: What is you view concerning Lycos and its possible takeover in the upcoming months?

Steve Harmon: I think it needs a major media partner, for every reason they have mentioned in the past. They did the fast dance with Barry Diller, and there was talk of a slow dance with CMGI, and now they are at the dance at 2am with no partner, in the corner, on their own. They need a partner, major broadcasting. If you look where the others are going, television is driving them.

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