BUSINESSWEEK ONLINE : JANUARY 31, 2000 ISSUE
NEWS: ANALYSIS & COMMENTARY

Why Stock Market Valuations Are Changing


-- More leading New Economy Internet companies will merge or strike deals with Old Economy bricks-and-mortar businesses in many sectors

-- The stocks of many Old Economy companies should strengthen over time as mergers are announced and Net stocks lose some sparkle

-- Investors will become more picky about which tech stocks to own, and companies with proven earnings will take top billing over established Net companies that can't turn eyeballs into profits

-- Long-term, companies like the combined AOL-Time Warner should post strong stock performances

-- A result of the changing valuations is a stronger, broader, and less volatile market



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CHART: Unprofitable Stocks Fall, Part 1

CHART: Unprofitable Stocks Fall, Part 2

TABLE: Why Stock Market Valuations Are Changing



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