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Technology Stocks : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: Bill Harmond who wrote (86211)	12/5/1999 4:00:00 PM
From: Glenn D. Rudolph	Respond to of 164684

Yahoo ? a top franchise in the B2C sector with continued strong growth prospects, already highly profitable Key factors supporting our purchase recommendation: 1. High Growth with High Profitability. With annualized revenues in excess of $600 million, Yahoo is still growing over 125% year-over-year. The company has already achieved its ?long-term? target operating margin of 35% (a level most internet companies will not ever achieve, or at least for several years), which leads us to believe there is additional upside. 2. Top Notch Management Team. Often a clich‚, but not in Yahoo?s case. Management quality and depth will be even more important for internet companies going forward. 3. Good Growth in Advertising and E-commerce. As web sites proliferate, we believe that Yahoo?s massive audience will enable it to protect its share of the online advertising market, which is growing 100% per year. We also expect that Yahoo will be able to capture increasing fees relating to transactions which take place on the Yahoo sites. 4. Strong Presence Internationally and on Devices. We believe that Yahoo! is the U.S. company best positioned to capture international growth, due to its majority ownership of 18 out of 19 international Yahoo!s. In addition, Yahoo! is aggressively expanding its presence onto handheld and wireless devices, to establish a critical mass of audience it can monetize going forward. . United States Price: $212 3/4 Henry Blodget 2 December 1999 Henry Blodget First Vice President Internet / E-Commerce Market Leaders to Further Solidify Positioning Focus Stock: Merrill Lynch & Co. Global Securities Research & Economics Group Global Fundamental Equity Research Department RC#30233712 2000 ? The Year Ahead Yahoo Recommendations Int. Term Price Earnings Per Share MVE/ Indicated Dividend Opinion Opinion 30-Nov-99 1998A 1999E 2000E 2000E Rev Rate Yield (%) United States Yahoo YHOO Buy D-1-1-9 212 ? 0.05 0.44 0.68 74x Nil Nil Amazon.com AMZN Accumulate D-2-1-9 86 13/16 (0.25) (1.14) (1.00) 11x Nil Nil America Online AOL Buy D-1-1-9 73 ? 0.06 0.34 0.65 12x Nil Nil Barnesandnoble.com BNBN Accumulate D-2-1-9 19 (0.72) (0.78) (0.81) 8x Nil Nil Doubleclick DCLK Buy D-1-1-9 160 1/16 (0.64) (0.39) (0.29) 20x Nil Nil Etoys ETYS Accumulate D-2-1-9 64 ? (0.28) (1.27) (1.45) 37x Nil Nil Excite@home ATHM Accumulate D-2-1-9 48 ? (0.18) (0.04) 0.16 26x Nil Nil Homestore.com HOMS Accumulate D-2-1-9 65 ? (0.87) (1.12) (0.59) 40x Nil Nil Interliant INIT Accumulate D-2-1-9 22 ? (1.21) (1.62) (2.40) 11x Nil Nil iVillage IVIL Accumulate D-2-1-9 28 5/16 (2.38) (3.02) (1.76) 11x Nil Nil Lycos LCOS Accumulate D-2-1-9 56 (0.06) (0.05) 0.11 17x Nil Nil Priceline.com PCLN Accumulate D-2-1-9 62 (0.63) (0.38) (0.27) 19x Nil Nil Quokka Sports QKKA Accumulate D-2-1-9 9 3/8 (0.32) (1.36) (1.79) 13x Nil Nil Software.com SWCM Accumulate D-2-1-9 97 1/16 (0.25) (0.26) (0.22) 51x Nil Nil 24/7 Media TFSM Buy D-1-1-9 50 ? (1.48) (1.38) (2.18) 8x Nil Nil UBid UBID Buy D-1-1-9 39 3/8 (0.66) (2.30) (2.31) 1x Nil Nil Webvan WBVN Accumulate D-2-1-9 24 11/16 NM (0.30) (0.54) 76x Nil Nil * Source: Merrill Lynch Internet Research Team. Comparable valuation is typically based on a multiple of revenues, as most internet companies are not profitable. Notes: The fiscal year for America Online ends June 30. The fiscal year for Etoys ends March 31. The fiscal year for Lycos ends July 31.