The Wall Street Journal and I are extremely skeptical of the upcoming Classmates.com IPO. In today's paper, The Journal writes that while the company is looking to raise up to $125 million, Wall Street is more focused on the future of other, more significant, privately-held social networking sites including Facebook, Friendster and LinkedIn.

Classmates.com looks like a cynical effort to cash in on the Street's desire for social networking stocks -- any social networking stocks! Several penny stocks purporting to have operations in the space are making the rounds on stock message boards and the newsletters of paid promoters. The companies appear to have no fundamental value but attract some attention because everyone is so excited about social networking. I won't mention any by name here because I don't want to give them any additional coverage.

It reminds me of the days when adding ".com" to a company's name would send the stock soaring, and it makes me think a bubble may be brewing.

Personally, I wouldn't buy into the hype. If investors still want to invest in social networking, it may be better to wait until there is a publicly-traded best-of-breed play. There is speculation that a Facebook IPO could be coming in the not so distant future. If the financials make sense then, by all means, investors may want to go for it. But for now, I would stay far away from social networking stocks.

The Wall Street Journal sees through the upcoming Classmates.com IPO, and so should you.

Classmates.com will help you find your high school classmates, for a fee. The problem is that finding people on the Internet through an Internet community is social networking: something much larger sites like MySpace and Facebook already offer. And those sites are free.

Classmates Media is selling $125 million worth of stock this week, and this looks more like a cynical effort to capitalize on Wall Street's hunger for social networking than an investment opportunity.

In some ways, it reminds me of the deluge of low-quality alternative energy companies that have come public in recent years. Classmates has story stock written all over it, but Classmates really isn't the story. It just looks the part, and is hoping investors will want a piece.

Last December, over 100 stocks were featured in our Top Picks for 2007 report. Now, at mid-year, we turn to the 20 advisors whose picks showed the strongest gains to get an update on their previous picks, as well as a new favorite stock for the second half of the year.

Mark Mowrey, editor of the Prudent Speculator TechValue Report, chose Cogent Inc. (NASDAQ: COGT), which rose 41% as of June 1, 2007. Although he maintains a $24 price target for those who own the stock, he no longer is recommending purchase.

For his new top idea, Mark looks at United Online Inc. (NASDAQ: UNTD). The advisor explains, "For as many reasons to be wary of the company, we find more to like about this net-centric company.

"Founded as Juno Online Services in May 1995, and formed via the merger of that company with fellow dial-up Internet services provider NetZero in June 2001, United Online is one of a select few surviving early Net access players.

"As UNTD milks the dial-up business for cash flow, management hopes to transition as many of those paying customers as they can to a new broadband offering. Still, revenue from the communications segment is declining at a rapid clip, falling 13 percent in 2006 to $375.9 million.

"So what is there to like about a company with declining revenue in its core business, the only savior for which is entry into an even more competitive space? The general answer is the provision of services folks utilize once they're already on the Net.