The media industry appears to have contacted dot-com fever. Hardly a week goes by without news news that a media group may sell shares in an or-dine operation, Viacom, owner of NM Networks, and Pearson, owner of the Financial Times, are among those considering such a step.
Telecommunications companies have also caught the bulg. Shares in Terra Networks, the internet access business of the Spanish company Telefonica, have risen threefold since it was spun offless than a month ago, and a number of other European carriers are considering whether to follow suit.
The trend is not confined to the information industries. Finanical services companies have become involved@with both the investment bank Donaldson Lufkin & Jenrette and Toronto Dominion Bank selling shares in online broking subsidiaries. Chase Manhattp is exploring a listing for parts of chase.com.
As the stock market love affair with the internet spreads, it is not surprising that long-established businesses are trying to benefit. E* Toys, a US online toy retailer that had $20 million of sales in the first half of this year, is worth $5.4 billion, while Toys R Us, with sales of $4.3billion, is worth $3.7 billion.
There are several attractions for traditional companies in carving out new intemet stocks:
First is the prospect of increasing a stockmarket valuation. With investors seen-drigly lining up to buy stock in start-up internet ventures, it seems an easy decision for a company with its roots in the traditional business world to repackage its online activates as a separate security.
Most chief executives find it hard to resist the immediate lure of a higher valuation. "Their first and foremost responsibility is to get the fall stock market value," for their business, says Jeffrey Elton. head of Integral, a Boston-based consulting firm.
Dow Jones, publisher of t
