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That's Why They're Called Net Profits


Up Front: PAPER PLAYS

THAT'S WHY THEY'RE CALLED NET PROFITS

WHO SAYS NOBODY'S MAKING money on the Internet? Just look at the executives of fledgling Internet-related companies. Since May alone, initial public offerings by four Net-related startups--Netscape, Spyglass, Performance Systems International, and UUNET--have made instant millions for at least 36 execs and directors.

Never mind that little significant business is being conducted over the Net, or that only one of the four companies (Spyglass, maker of Net software) is profitable. Even though the startups had combined 1994 sales of just $34 million, investors have sent their combined market cap soaring to about $4.5 billion. Says Michael Walsh, president of consultant Internet Info, it's like "the early days of biotech."

Take the Aug. 9 IPO by Netscape, a maker of software to browse and do business on the Net's World Wide Web. Even though Netscape lost $1.6 million on second-quarter sales of $11.9 million, its $28 offering sparked an investor frenzy. The stock more than doubled in value its first day. Result: Founder and Chairman James Clark's 32% stake--$272 million at the $28 level--is now worth a cool $566 million. That makes up for his not taking a salary last year.EDITED BY LARRY LIGHT, WITH OLUWABUNMI SHABI Robert D. Hof


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