Henry Blodget Quotes (48 Quotes)

We expect the challenging environment for online advertising to continue into the second quarter 2001, three-to-six months longer than we had originally expected. Because of this, we are not able to raise our bottom line estimates.

We continue to believe that the first quarter will be the toughest quarter for online advertising. We expect market growth of only 10 percent year-over-year. We believe growth will then accelerate modestly through the year.

We would therefore remain cautious about adding new money to online advertising-driven stocks until the first or second quarter, when we should have better visibility. We continue to believe that the first quarter will be the toughest quarter, with only 10 percent year-over-year growth.

I could see Amazon and eBay merging. Amazon operates in a huge market, but it's got lower margin revenue. eBay has higher margin revenues, but the secondhand and small-business markets will always be limited relative to the size of the retail market. Combine the two, though, and that could be a very powerful entity.

However, if the company is successful, we believe the cash burn can start to decline significantly in one to two quarters and can last CMGI through break-even.

The big question mark remains the long-term sustainable growth rate, especially with continued deceleration of U.S. business.

At the same time, however, we continue to be discouraged by one basic trend a steady increase in our loss estimates without a correspondingly large increase in revenue or profitability estimates.

We continue to believe Yahoo will make a good long-term investment. As a result of the challenging advertising environment, however, we believe the stock could see significant downside in the next three to six months.

We believe there could be a shakeout in the B2C (business-to-consumer) online retailing sector as companies that have had to spend aggressively to gain new customers will be running out of money.

Near-term forecasts call for pain, especially in the travel sector.

We also believe such controversy, if any, would come at a poor time for Microsoft, given that the company is awaiting the Appeals Court ruling on the existing antitrust trial. As a result, we believe it is possible that this could put a damper on the positive sentiment surrounding the stock.

We think the Internet is tremendously profound. It will continue to have an effect on the global economy over the next five-to-10 years. But there's no way that it is a large enough opportunity to support the 400 companies that have gone public. And I think if you look back in history at different emerging industries, we've often had this feeling that the PCs for example are going to change the world. All you have to do is buy a PC company and you're safe. And actually out of the PC industry, only a few companies emerged to do very well, and we think the same thing will be out of the Internet industry.

The majority of AOL's profits are derived from its pure advertising and commerce revenue, so strong sequential growth in this line is critical to the long-term growth story.

The sentiment surrounding the leading companies in the consumer Internet sector appears to be improving as we approach the seasonally strong fall and winter period. We continue to believe that some of the leading consumer advertising and e-commerce stocks -- America Online, Yahoo, and Amazon. com -- will benefit from this.

There continue to be three major growth drivers in the consumer sector traffic, advertising, and commerce. Traffic growth in the U. S. continues to slow, as more than 50 percent of the total market is already online. More importantly, we estimate that more than 80 percent of disposable income is already online.

We do not expect significant upside to our estimates. As we have said before, we believe the company is going through an awkward transition from a hyper-growth, revenue momentum story to a long-term growth and earnings story. Despite its growing pains, we continue to believe long-term, patient investors will be rewarded.

The majority of today's pure-play Internet companies will never make money and will not exist in three-to-five years. There will be a lot of consolidation and a lot of failure, and ultimately valuations will fall more in line with historical norms.

With paid search, advertisers bid against each other for rank positioning on commercial search terms, paying each time a user 'clicks' on their result.

The company believes in one service with multiple devices...the proliferation of devices could actually be a demand driver for broadband due to the cost of additional phone lines.

We have received a number of calls on whether a combination of Yahoo and Disney would make sense. We believe an investment would be much more likely. Given that AOL-Time Warner is likely to be a real entity within a few weeks, creating a very strong globa

AOL seems undervalued by almost any measure. If any mega-merger of this size can work, this one can.

The online advertising market appears to be stabilizing, but we believe it will continue to remain challenging for the foreseeable future.

...This consolidation and shakeout in the space will continue for the next few months but longer-term will bode very well for industry leading companies like Amazon.

After that point, it is likely that the case could be appealed to the Supreme Court, which could add at least another six months to the outcome. So the case may not conclude until 2003.

Although a settlement as described would be positive for the company, we believe it would be premature to conclude that the company's legal issues are behind it.

After re-analyzing Amazon's cash and liquidity, we remain comfortable with it. Amazon needs to stay on track to turn an operating profit in Q4, but as long as several key trends continue to improve, we consider a squeeze very unlikely.

The environment continues to worsen versus our expectations, and we continue to think the seasonally weak first quarter will be the toughest quarter in terms of year-over-year growth. We also continue to expect the market to strengthen in the second half of the year, when the impact of the dot.com bubble has worked its way out of the system.

Our estimate for fourth quarter product revenue is approximately 1 billion. To achieve our estimate, we believe Amazon has to book about 750 million in the eight week holiday season. Our back-of-the-envelope analysis of the Delight-O-Meter suggests it is off to a solid start.

Management maintained full-year 2001 target of 20-to-30 percent revenue growth. To be conservative, we are trimming our estimate from 3.3 billion to 3.2 billion.

Near-term, in a market environment in which investors are fleeing to quality, its stock could continue to do well. Our analysis, however, suggests that the company's long-term earnings growth is likely to be slower than the 15 percent to 20 percent consensus.

Despite the awful near-term financial outlook, the key value-drivers showed impressive growth.

As the shakeout continues, we continue to believe that the Internet spoils will go to the few, not the many. As one investor we respect put it, anytime a new industry emerges, many turtles hatch, few make it to the sea.

We also continue to believe that the market is transitioning into a more mature phase of growth ... this will cause a shakeout and consolidation. As this consolidation continues, we believe the Internet spoils will increasingly go to the few, not the many.

Every hour that the average user spends online, AOL pays for it directly, yet the average user only pays a flat rate of 21.95 a month. So if usage continues to go up, AOL's cost continues to increase and this is something they've started to control over the last several quarters.

We also believe that some analysts are projecting that the company will miss the low end of the guidance range in Q3 and withdraw its goal of operating profitability in Q4. As a result, if the company hits the mid-point of the guidance range and reaffirms Q4 operating profitability, we would expect the stock to go up.

We continue to view Office XP as a 'nice-to-have,' not a 'must-have,' especially in a weak economy. We have therefore baked only modest impact from the launch into our estimates.

Some legal experts believe that the appeals court ruling will have a ripple effect overseas, leading to increased activity in a region where Microsoft lacks the political clout that it has in the U.S..

We continue to believe in the long-term growth of online advertising. Near-term, however, we don't believe the market will bottom until the first quarter. We estimate only single-digit year-over-year market growth in the first quarter.

We remain enthusiastic about eBay's business model and market leadership position.

We continue to think some upside is possible to these estimates, despite weakness in the online advertising market. We are not looking for as much upside as in the past, however.

Since one of these possibilities would be negative for the stock (earnings miss), two would be neutral, positive, or negative (acquisition, management change), and one would probably be positive (takeout strategic investment), it is hard to know what the impact on the stock might be.

A settlement as broadly described would represent a positive for the company and stock. Importantly, however, the states have reportedly not yet signed off on such a settlement, and without their support, the case will likely still head back to the district court.

We believe AOL and Time Warner are in the final stages of gaining approval from U. S. and Europe regulatory commissions. We do expect any concessions that would materially impact future performance.

The biggest challenge AOL faces is really controlling its usage-based cost structure.

While we still believe the model is compelling long term, the business continues to be heavily dependent on airline ticket sales. As a result, it appears management has limited visibility to accurately forecast the business.

We continue to think there is long-term upside potential for the stocks of the leading companies in the Internet sector. Although we acknowledge the potential for appreciation over the intermediate term, we strongly believe that volatility remains a significant risk over this same timeframe and we would stress the long term.

We still believe that, over the intermediate term, these factors will likely outweigh controversy surrounding Windows XP, so we maintain our 'accumulate' rating.

We contend AOL Time Warner is powerful enough that it won't go gently into the night (unlike Novell, WordPerfect, Lotus, Netscape, et al). We do believe, however, that developments between the two companies over the next year or two will have significant bearing on the long-term direction of the industry.