INTERNET SERVER PRICED AT TOP; NETZERO TO POST INITIAL OFFERING.

Byline: Jason Z. Cohen Staff Writer

Internet service provider NetZero was priced at the top of a revised price range Thursday in anticipation of what is expected to be a strong initial public offering this morning.

Experts expect a sharp rise in the stock price after the initial offering despite the market's poor performance Thursday. Shares of NetZero were priced at $16 late Thursday, well above the $9 to $11 range the company expected when it announced its IPO earlier this year.

``What it means is there's a lot of demand for the company's stock,'' said Gail Bronson, senior analyst for Calabasas-based IPO Monitor.

It also means more capital for the company. Selling 10 million shares at $16 will raise $160 million, while under its previous price range the company would have raised only $90 million to $110 million.

Investors apparently are impressed with NetZero's free Internet service business model, Bronson said. The company gives users free Internet service in exchange for their agreeing to tolerate a continuous stream of advertising banners on a portion of their screen.

The company, a product of Pasadena-based incubator idealab, will be listed on the Nasdaq National Market under the ticker symbol NZRO.

Tom Taulli, Internet stock analyst and author of a weekly IPO column published by Internet.com, said he was only slightly concerned about the effect of the broader market's performance Thursday on NetZero's initial public offering.

Although the Nasdaq lost 3.8 percent of its value, Taulli said he believes NetZero's stock could peak at $100 today, more than six times its offering price.

The recent wave of Internet IPOs has not satiated the market's pent-up demand for strong initial offerings, Taulli said.

EGain Communications Corp. had a strong first day of trading Thursday despite the fact the market was down. EGain jumped $11 to $23. ``The Internet is very strong. It usually doesn't go away very quickly,'' Taulli said.

The price of NetZero likely will go sharply higher before sliding downward a bit, Taulli said. He predicted the stock will stabilize well above its initial price of $16 a share, though, he said.