Internet companies are not providing the financial returns longterm investors are looking for, according to specialist information technology investment bankers Broadview Associates Inc. Of 25 recent initial public offerings of internet related companies, 21 are trading at a share value below their original launch price. Their figures give an average depreciation of 34% over all 25 companies analysed. During 1996 the Nasdaq index overall gained 25%, and for the rest of 1997 has remained flat, showing that the Internet-related public offerings have fared significantly worse than the rest of the market. Victor Basta, a Broadview managing director, said: Many Internet firms do not yet have enough product or service differentiation to rise above the general noise of the marketplace. The most successful companies have been Yahoo! Inc (+113%), Netscape Communications Corp (+79%), and firewall specialist Checkpoint Software Technologies Ltd (+36%) all of which have risen from product development to occupying defined niches in their markets. Spyglass Inc, on the other hand, which made a big splash in the market at the end of 1995, has since lost 61% of its value, having failed to capitalize on its enhanced Mosaic-based Web technology despite winning Microsoft Corp as one of its customers.
