Dateline: 3/29/99

Quick now! Name ten Canadian Internet stocks! Let's see, there's Bid.com and er, um, there's, ...well there's Bid.com and let me think a minute....Mmm...there's Bid.com and uh, well, gee, I can't think of any others! I'm willing to bet that active investors would be hard pressed to name more. And the average Canadian would not even come up with Bid.com.

But if you were asked to name ten American Internet stocks, well! There's Yahoo, E-Bay, Amazon.com, America Online, CBS Marketwatch, E-Trade, Lycos, Excite, Geocities, and Infoseek. All well known names. Even the average Joe in the street with no interest in such things could probably name five.

From this quick comparison you might get the idea that there are no Canadian Internet stocks. But you would be wrong. There are quite a few of them. They just don't have the same sort of exposure as the American ones.

And in Canada, much of the Internet presence is dominated by other media companies. For example, the Canadian Online Explorer or Canoe site is owned by a limited partnership of Sun Media Inc. and BCE Media Investments. Southam owns Canada.com. And the leading mutual fund site, GLOBEfund, is owned by The Globe & Mail. So three major sites are owned by newspapers.

To invest in any of these major Canadian Internet presences you would have to invest in the parent companies. Southam used to be a publicly traded company but was recently taken private by owner Conrad Black. The others are all publicly traded. The Globe & Mail is owned by the Thomson Corporation. Sun Media was recently acquired by Quebecor. And BCE Media is a subsidiary of one of Canada's leading blue chip stocks, Bell Canada Enterprises.

Not only does Bell Canada have a stake in Canoe, it is part of the MediaLinx Interactive Limited Partnership that owns Sympatico, one of Canada's largest ISPs. Investing in any telephone company gets you a stake in Sympatico.

Another leading ISP, the Canadian @Home Network is licensed to four different cable companies, Shaw Communications, Rogers Communications, Le Groupe Videotron, and Cogeco, all of which are publicly traded companies.

All of these companies may some day spin off their Internet divisions as IPOs just as CBS Television Network spun off CBS Marketwatch as a separate company with its own stock listing. For now, the parent companies is where the action is.

But there are more than just these majors. There are a great many small to medium size Canadian companies in the Internet business. Many are privately held, but a few are publicly traded. Some are listed only on American exchanges, usually NASDAQ or OTC BB. Others have dual listings on Canadian and American exchanges. And some only have a Canadian listing.

There is a perception, probably correct, that American investors put a higher valuation on Internet stocks than Canadians do. Probably due to our native conservatism. So there is pressure on companies to list in the U.S. to get exposure to a broader investment base. Bid.com is in the process of getting a NASDAQ listing and rumours that the listing was imminent, as well as other rumours about a possible takeover by E-Bay, have doubled the stock price in the last week.

Over the next week or two we will look at more of the Canadian Internet scene. Wednesday we'll look at E-Commerce. Friday we'll look at Online Brokers. We'll continue over the following week with Internet Service Providers, news and entertainment, investment sites, and more.

Canadian Internet Stock Average

To keep track of the Canadian Internet scene, I've created the Canadian Internet Stock Average. It will keep track of how Canadian Internet stocks are doing as an investment. I've started the index off with the ten most well known Canadian Internet stocks, including two cable companies. More will be added with subsequent articles.

There may be some controversy over whether I should include the telcos, the publishers and the cable companies in the listing. But the fact is that these companies have a sizeable stake in the Internet. If you want to invest in the Internet in Canada, you should consider investing in these companies. And so I am including them. If a web presence like Canoe is later spun off as a separate publicly traded company, the new company will be added and the parent company deleted from the index.

Going Daily

My survey of reader prferences for daily column topics yielded the following results:

Additionally I got two emailed letters, one expressing a preference for a Pot Pourri of daily articles and the other for sticking to a weekly column. I'm assuming they also indicated their preferences in the survey. The sample was small. Only eight people bothered to respond. Nevertheless, there is a strong interest in having me stick to a weekly column.

For a variety of reasons, my personal preference is to try doing a daily column, but keeping it tighter and more narrowly focused. This week will be my first attempt at this. If I find it too overwhelming a task, I will cut back to three articles a week. And I may occasionally cut back to one article a week to take a break. This week, I'm focusing on a theme - Canadian Internet stocks - for Monday, Wednesday and Friday and will write on Internet Democracy Tuesday and my first Stock in the News report on Thursday.

Because I have the weekend to write the Monday piece, it will sometimes be a bit longer. The rest of the week will consist of shorter articles.

Disclaimer: As with all my columns here, I should re-iterate a precaution. I am not a professional financial advisor. I am a financial journalist and editorialist. The views in these columns are my personal opinions. The author owns shares in Bid.com and Shaw Communications.

New Features:

As mentioned above, I've added the Canadian Internet Stock Average as a new feature.

I've added a new Net Link category called Broadcasts which features links to sites that have audio and/or video on investing.

I get lots of email from readers, much of it asking for advice or information on something. I've reprinted some of the letters in my new feature - Mailbag - along with my replies.

I'll be adding new Net Link categories on RESPs and Entrepreneurship soon as the result of inquiries from readers.

Bulletin Board:

Do you have a favorite Canadian Internet stock? Why not tell us about it on the Investing (Canada) Bulletin Board!

Newsletter:

You're invited to get my weekly emailed Newsletter in which I let you know what the upcoming article will be and of any significant changes and additions to this site.

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