Even with the slight dip in the market on Monday,
Internet stocks rebounded even higher, turning
high-tech millionaires into billionaires - and beyond.

"They are defying gravity," said Jim Balderston, an
analyst with Zona Research based in Redwood City,
Calif. "The question is: is it a stampede or an orderly
move by investors?"

Certainly one of the fastest to rise has been Pierre
Omidyar's eBay. The San Jose, Calif.-based online
auction site went public in September and has seen an
opening price of $18 per share grow to $223.50
yesterday. That's in less than three months.

Chairman and founder of eBay, Omidyar is now in the
ranks of early high-tech billionaires: Jerry Yang and
David Filo of Yahoo!. Omidyar holds about 10 million
shares of eBay stock, or 38 percent of the company,
which was worth just over $3.4 billion yesterday.

His vice president, Jeffrey Skoll, holds 7 million
shares, or about 26 percent of eBay, which placed his
worth at approximately $1.56 billion.

With Yahoo!'s stock closing yesterday at 2051/8,
co-founder Filo's stake stood at nearly $2.5 billion,
and co-founder Yang's net worth at $2.4 billion.

Inktomi, a San Mateo, Calif.-based Internet search
engine, closed at 1311/8. Co-founder and chief
scientist Eric Brewer's 11 percent stake in the
company was worth $342 million, and CTO and
co-founder Paul Gauthier's 10 percent checked in at
$311 million.

In July, analysts believed the rapid rise of high-tech
stocks couldn't hold. And the high valuations of some
companies were attributed to a buying frenzy over
Internet hype.

The buying frenzy at Amazon.com raised founder Jeff
Bezos' stake at the company by $914 million - and
that was just yesterday.

"The two things pushing these stocks are traffic and
press releases," said Patrick Keane, an analyst with
Jupiter Communications based in New York. "For
example, just mentioning you're doing business with
Yahoo! can push a stock."

But not all high-tech stocks are riding the buying
frenzy. DoubleClick, the New York-based media
company, closed at 39, well off its high of 755/16.

And while Earthlink, the Pasadena, Calif.-based
Internet service provider closed at a respectable 61
yesterday, it couldn't buy its founder and chairman,
Sky Dayton, membership - yet - in the billionaires'
club. Dayton's 14 percent was worth "only" $243
million.

But in general, the price of Internet stocks are growing
on par with the size of the online community. In the
United States, 36 million households were online in
1998, according to Jupiter Communications. Of those,
8.7 million were first-time users. And the number of
households online is expected to nearly double by
2002, to just over 61 million.

As more people get online, they discover the products
and tools available on the Internet. And this familiarity
may be one factor driving people to buy high-tech
stocks.

"In one sense people are investing in Internet stocks in
a way they understand," Balderston said. "In other
words they use a Yahoo! portal so they invest in it
because they understand it. And they use an eBay to
buy things and that's got to have an impact on
enthusiasm of Internet stocks."

But Balderston cautions against making any certain
projections about the road ahead for the Internet
market.

"The Internet stocks are leaving most observers
speechless," Balderston said. "And anyone claiming
with certainty that they know should be listened to
warily."

-- Lauren Barack - 12/17/98