Whether this exponential rise in Internet stock prices could be "the halo effect of these dot-com stocks'' as suggested by analyst Ashok Kumar of Piper Jaffray Inc. in a Bloomberg interview, or the result of the "Day Traders' effect", everyone seems to agree that Internet communications and e-commerce are here to stay and will grow even larger. There is no doubt that intense competition in business models and technology will drive small Internet companies to consolidate or fade out.

The premier Internet service, web-navigation and content providers such as AOL and Yahoo recognize that company profitability can be maintained only when additional revenue, for example from the e-commerce, is generated.   Membership or advertisement fees alone might be not sufficient to offset the high costs of building systems big enough to handle the traffic. However, both AOL and Yahoo may soon be facing tough competition from new rivals such as @Home Network and AltaVista.

@Home Network, a leading provider of high-speed Internet services via cable infrastructures to both residences and businesses, is looking for big expansion and could become a tidal wave for AOL. According to @Home, its peak speed can be over 100 times faster than traditional dial-up phone lines.

Although AOL, under an agreement with Bell Atlantic Corp., will start offering digital subscriber line access to AOL customers on the Bell Atlantic area network, AOL customers in certain parts of the nation are still not able to access the Internet at 56 KBPS, which is the standard data transfer rate of modems in PCs.

To make things even more complicated for AOL, @Home has already reached affiliate agreements with 18 leading cable companies worldwide including Tele-Communications, Inc. (TCI) which has an interest in @Home Network. The pressure on AOL to improve their service could intensify when the merger between @Home and Excite is complete and AT&T Broadband Services, which was founded as a result of a merger between TCI and AT&T Corp., begins its operation in mid-1999. Excite will add a complete line of services including web navigation and e-commerce to @Home's site while the new AT&T Broadband Services will provide a 100-fold increase in @Home's capacity which will enable @Home to support up to 5 million broadband users or half of  AOL current members.

Compaq, with nearly 13 million PC's shipped world-wide last year, had an already well-planned "dot.com" venture before announcing the spin-off of AltaVista to a separate entity. With an "Internet-Ready" keyboard, Compaq's owners can completely bypass AOL's and Yahoo's service to the AltaVista site for content, search engines, online shopping and more. In a recent