This week’s stock market review
Last week, UK magazine group Emap announced plans to spend £250m on building Internet ventures over the next three years, with the first tranche of £75m to be spent this year. The company is optimistic that its proposed on-line strategy will increase its revenues stream significantly.
The key part of Emap's proposals is investing in wholly-owned digital businesses, as well as pursuing joint ventures. It also plans to buy related Internet businesses.
But the announcement failed to impress the City and Emap's stock price fell sharply. It is obvious that many analysts are becoming weary of media companies announcing their Web strategies.
Freeserve shows strong growth but still has some way to go
Freeserve has been trying hard to recover from its recent difficulties following the decision by its US rivals Alta Vista and NTL to cut their Internet access charges. The company last week served a surprisingly good set of revenue figures to market analysts. It also revealed an increase in the number of its service users.
The 36 per cent rise in revenues for the third quarter to January suggests that Freeserve may have a few aces to serve at its competitors.
Freeserve's active users are fast approaching two million but many analysts remain cautious about the company's prospects. Although it remains the UK's largest Internet provider, it is clearly not out of the woods yet since its stock price suffered huge setbacks recently over fears that many of its customers might be lured away by price-cutting rivals.
The City is becoming less bullish on the stock, mindful that the advent of cheaper phone charges may prolong the date when Freeserve will become profitable.
"New economy" stocks are losing their lustre
Evidence is emerging that investors are getting cold feet about "new economy" stocks. Many dot.com stocks are coming under pressure as a growing number of investors switch back to the tried and tested old economy stocks, particularly in the banking sector.
Much of the gains achieved by the FTSE 100 last week came from value stocks that are traditionally regarded as safe bets. And the Dow Jones Industrial Average recorded its single highest one-day rise, when it clocked up 500 points on Thursday, due largely to good performance of old economy stocks.
Winners and losers