The Week in Review -- March 5, 1999

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  2/26 Close 3/5 Close Change %Change
DJIA 9,306.58 9,736.08 +429.50 +4.62
S&P 500 1,238.33 1,275.47 +37.14 +3.00
Nasdaq 2,288.01 2,337.11 +49.10 +2.15

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Suddenly: Internet!
by Jerry Thomas (tmfcheeze@aol.com)

Greetings, Fools.

I've been reading a biography of Bill Gates this week. Published in 1993, the particular book I have in hand is the story of a remarkable character building his remarkable company at the center of the computer revolution. Yet with all the surprising twists and turns leading Microsoft (Nasdaq: MSFT) and the man behind it to a position of dominance in the industry, perhaps the most remarkable thing about this book is that the word Internet does not appear anywhere in the text. Imagine: implausible as it may seem, just five-and-a-half years ago it was a perfectly reasonable proposition to write a book about the history of computing without ever once muttering those now-ubiquitous syllables, "dot-com."

Bill Gates was famously slow when it came to acknowledging the commercial potential of cyberspace, but in spite of his legendary perspicacity he can hardly be blamed for the lapse. To foresee then the world of 1999, with its Amazons and its Yahoo!s and its E*Trades, would have been something akin to sitting in a night club in Hamburg in 1962 and predicting that the scruffy band on the stage -- some young outfit called "The Beatles" -- would one day be bigger than Elvis. How quickly this world came upon us. Search for its meaning with "Internet Evolution," a round-up of articles featured this week on The Motley Fool.

"Internet Evolution" is a collection of Foolish features that each take a look at the future of the medium. There are three penetrating essays by Louis Corrigan (TMF Seymor), an analysis of eBay's (Nasdaq: EBAY) business model by Fool co-founder Tom Gardner, and interviews with two of the online world's most innovative retailers. If you have any interest at all in the growing possibilities of e-commerce, this is the place to mull over the prospects.

The suddenness of the arrival of cyberspace can be seen in the nature of the questions in this week's StockTalk Interview with Todd Krizelman and Stephan Paternot, co-CEOs of theglobe.com (Nasdaq: TGLO). Yi-Hsin Chang (TMF Puck), in her very first question to the guys, points out that just five years ago they were still living in a Cornell University dormitory and paying their student employees with pizza. Now they're a global phenomenon with a market cap skirting the half-billion dollar mark. Heady stuff, yes, but not atypical of this industry.

The Motley Fool is sometimes criticized for spending too much time focusing on Internet companies, but I do think our fascination with them is understandable. We are, after all, an Internet company ourselves, and our customers, generally, are all online as well. Of course, there are readers of our nationally syndicated newspaper column, and listeners to The Motley Fool Radio Show who aren't online -- yet -- but if we seem to have an affinity for cyberspace, it's because we live here and we believe in its future. That faith is reflected in the Internet stocks in the Fool's Rule Breaker Portfolio, which last Wednesday saw David Gardner's stirring defense of eBay (Nasdaq: EBAY), a new portfolio holding. Even the more conservative Rule Maker Portfolio recently added Yahoo! (Nasdaq: YHOO) to its holdings.

That said, let us hope that our interest in these new companies does not overwhelm the rest of our Foolish mission. The idea that sound investing requires intelligent research of sound companies in growing industries came long before the day computers were ever joined together with modems. Take some time to explore these features, like this week's Dueling Fools on foreign investing and Jeff Fischer's (TMF Jeff) discussion of stock splits in Tuesday's Rule Breaker Portfolio report. This was also a good week for Fribbles, with Monday's and Tuesday's entries worth special mention.

There are times when I wonder when the Internet will stop seeming like an amazing, whiz-bang innovation and start being regarded as just another modern convenience, like a municipal sewage treatment plant or a toaster oven. I suppose that that will happen when it finally becomes clear exactly what the Internet can do. The possibilities still have not been completely surveyed, and no two companies online are approaching the matter from precisely the same angle. It is fascinating to watch the developments.

Oh, yes -- the book I'm reading? It's Gates, by Stephen Manes and Paul Andrews. It's a good read: authoritative, well documented, and even suspenseful. Check it out.

Until next week,
Fool on!

Cheeze

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