|
Internet firms' shares surge
|
 |
February 27, 1998: 3:16 p.m. ET
Companies doing electronic business expected to gain by President's actions
|
NEW YORK (CNNfn) - If a company sells it, schleps it or searches it on the Internet, chances are its stock was up Friday after electronic commerce got a boost from comments by President Clinton.
Addressing a technology conference in San Francisco Thursday evening, Clinton endorsed a moratorium on new sales taxes on the Internet and its electronic commerce.
"There should be no special breaks for the Internet, but we can't allow unfair taxation to weight it down and stunt the development of the most promising new economic opportunity in decades," Clinton said.
Investors responded to the promise of less restraint on Internet commerce by snapping up shares of companies that do business on the Web.
Amazon.com was one of the bigger winners in Friday afternoon trading. Its stock (AMZN) booked up gains, rising 2-15/16 to 75-11/16 as investors seemed to predict that consumers would snap up more reading material via the online bookseller. Investors pushed up Amazon competitor Barnes & Noble Inc. as well. Its stock (BKS) rose 1-5/8 to 35-7/8.
As a group, Internet search engine firm shares found higher gains after Clinton's comments. Yahoo! Inc. (YHOO) was up 2-7/8 to 71 and Excite Inc. (XCIT) rose 3-7/16 to 47-5/8. Other search companies moving ahead included Lycos Inc. (LCOS), up 2-3/16 to 41-7/8 and Infoseek Corp. (SEEK), up 1-1/8 to 16-1/8.
Companies selling computers via cyberspace also racked up gains on anticipation of higher sales of big-ticket PCs, where the lack of a sales tax could become an even bigger incentive. Dell Computer Corp. (DELL) leapt 5-1/8 to 138-3/8 and Gateway 2000 (GTW) managed to rise 1/2 to 44-1/4.
Shares of CMG Information Services Inc. (CMGI), a developer of Internet and database management technologies, designed for use in electronic commerce, rose 2-3/4 to 46.
Brave new electronic frontier
Electronic commerce on the Internet is still in its infancy as companies try to coax credit card numbers from consumers online. Many consumers still hold fears that once their personal financial information is transmitted online, it could be intercepted and used for unauthorized transactions.
Still, Internet commerce is becoming a force that can't be ignored. Government figures estimate that online commerce totaled about $8 billion last year and expect that number to grow to more than $300 billion in the next four years.
Freedom from sales taxes would be a strong incentive to lure consumers, said Ryan Jacob, director of research for the IPO Value Monitor.
"One of the reasons why consumers would consider using the Internet more for the convenience and other reasons is the fact that they can save on sales tax," he said. "Maybe they pay a little bit for the shipping but in the long run end up ahead."
Clinton was endorsing legislation before the U.S. Congress that would place a moratorium on new sales taxes for the Internet. A bill before the U.S. House of Representatives would ban new taxes for six years. The Senate version does not specify a time period.
Clinton's endorsement of it puts him at odds with many governors, who are concerned that Internet sales can escape state sales tax levies, deprive state and local governments of crucial revenues, and drain away business from local vendors.
The National Governors Association adopted a resolution earlier this week urging Congress to pass legislation that would prohibit taxation of Internet access but would allow states to impose taxes on electronic commerce
"State and local governments depend on existing sales and excise taxes to generate about 50 percent of total state and local tax revenues. These revenues support a wide range of public services, including police protection, education, community services, and health care," the association said.
|
|
|
|
|
 |
|
