Stocks: Merrill's portal push

Verity is one company which is living the high life on the strength of the portal phenomenon. Its poor performance in recent years was partly turned around in Q3 98, with revenue increasing 148% on 1997 figures. Then the Merrill Lynch report in mid-November (see page 20) made the portal scene hot, turnover in Verity stock went through the roof, and it hasn't flagged since. It's pushing levels not seen since its IPO in 1995.

Excalibur Technologies took a while to follow the trend, but the pay-off was just as sweet. The company hadn't clawed back to profitability after a lean stretch, but the portal bandwagon picked up the stock in January after alliances were announced with FileNET and StorageTek.Favourable comparisons were made to Verity, which had already jumped, though Excalibur still lacked profits. The January quarter was the turning point, and prospects are rosy.

Information Advantage hasn't been as fortunate. It also benefited from the Merrill-induced hype (although late), but it was let down by bad figures. The February launch of its portal product, MyEureka!, was accompanied by good financials. The shares dipped anyway, apparently on expectation of poor performance. These fears were confirmed when Q1 99 produced a loss of 19c per share when most analysts expected a 4c profit, adding further to the slump.