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The Internet Capitalist
S.G. Cowen's Companion To Internet Investing
Oct. 23, 1998
Scott Reamer: 212.495.7769 reamers@sgcowen.com
The Week
Macroeconomics Trumps Microeconomics
Q3 Earnings: So Far, So Good
Trend Watch
It's The Relationship That Matters
Company Watch
America Online (AOL)
Amazon.com (AMZN)
Yahoo! (YHOO)
Excite (XCIT)
Sterling Commerce (SE)
Observations
A Slowdown In Traditional Media Advertising?
Valuation Watch
Internet Boom Meets Internet Backlash
Why Increasing Returns Matter
Some Thoughts On MSFT V. DOJ
The Calendar
This Week: Earnings
Data Bank
The S.G. Cowen Internet Universe
======================================
"The Internet Capitalist" is published every two weeks by the S.G. Cowen
Internet Research team and is distributed through email, First Call and fax.
This companion piece attempts to place both anecdotal and concrete data
within a thematic context that will help institutional investors gauge where
the greatest shareholder value will be created over time in the Internet
universe. And though we certainly subscribe to the notion that "less is
more", we have included a broad array of issues within this piece, the
underlying logic being that successful Internet investing necessarily
demands a wider, not narrower, view of these stocks and the issues that
drive them. Additionally, since the Internet is also a democratic medium at
heart we encourage feedback. Suggestions, challenges, criticisms; all are
welcome. Our hope is that this piece will offer, on balance, greater
utility for the one commodity with any real value: time.
SG Cowen Securities Corporation makes a market in AMZN, YHOO and XCIT
securities.
SG Cowen Securities Corporation co-managed an offering of AOL securities
within the last three years.
To be included on the distribution list simply send an email message to
infomail@sgcowen.com with the phrase "subscribe capitalist" in the body of
the text, contact your S.G. Cowen institutional salesperson, or a member of
the research team. Should you be moved to un-subscribe yourself from the
list, send an email to infomail@sgcowen.com with the phrase "unsubscribe
capitalist" in the body of the message. Further information on any of the
above securities may be obtained from our offices. This report is published
solely for information purposes, and is not to be construed as an offer to
sell or the solicitation of an offer to buy any security in any state where
such an offer or solicitation would be illegal. The information herein is
based on sources we believe to be reliable but is not guaranteed by us and
does not purport to be a complete statement or summary of the available
data. Any opinions expressed herein are statements of our judgment on this
date and are subject to change without notice. S.G. Cowen , or one or more
of its employees, including the writer of this report, may have a position
in any of the securities discussed herein. The contents and appearance of
this report are Copyright(c) and Trademark(tm) S.G. Cowen 1998. All rights
reserved.
Introduction
Why "Capitalist"? The Internet is interesting and hip. It's also popular and
cool. Unfortunately, recognition of these facts wouldn't have necessarily
made you much money over the last few years. Indeed, an investment strategy
based on these gleanings would have left you with a portfolio of Java, VRML,
and "push" technology vendors. And though each of these might have created
shareholder value on the margins, none would have compensated you for the
risk inherent in Internet investing or for the opportunity cost of not being
more fully invested in more profitable Internet themes. Our goal, then, with
"The Internet Capitalist" is to identify and profit from the dislocations
that the Internet has created for businesses and consumers alike. We start
by asking three basic questions: Which companies have identified the revenue
opportunities created by the Internet's growth as a consumer and business
medium? Which have the skill sets and management breadth to execute against
these opportunities? and Which have business models that will create
substantial shareholder value over time? Our answers to these questions
should help you capture the arc of our thinking in this industry as it
evolves from a network for academics into a medium for the masses.
Why "Companion"? We hope this piece asks as many questions as it answers,
and generates as much debate as it satisfies (which we plan to include).
Coupled with a user friendly layout, we want "The Internet Capitalist" to
stimulate and ease the investment decision. The mental framework with which
we parse Internet investments is defined broadly and driven by a few
relatively simple themes. Within this framework, however, there are multiple
paths to generating superior, above-market returns. "The Internet
Capitalist" is our attempt to illustrate those paths on an ongoing basis,
determine the commonality among them, and suggest how shareholder value will
be impacted and where it will flow. And though you'll find us to be bullish
on the Internet sector generally, our expectations for these stocks are
tempered by three realities. First, that the market remains relatively
inefficient for these securities, which makes taking a substantial ownership
position both difficult and costly. Second, valuation levels leave little to
no room for errors of execution or strategy. Third, profits (or cash flow)
matter; progress toward meaningful profitability is a necessary condition
for an increase in shareholder value. With those caveats, we still believe
investors can achieve superior returns based on a patient, disciplined, long
term strategy toward investing in this sector. We hope "The Internet
Capitalist" becomes an indispensable tool toward that end.
The Week
Macroeconomics Trumps Microeconomics
We knew something was different, really different, about the market's
behavior when Yahoo! (YHOO-Strong Buy) reported their September quarter
results on October 7th, roundly (and rightly) considered a blow-out quarter,
and the stock dropped the next day more than 10%. It wasn't simply an
exercise in "selling the news", since the quarterly results (and the
magnitude of their upside) was, indeed, new news. The halcyon days of yore
(for Internet stocks and the broader market), most certainly were over. In
Yahoo!'s case, macroeconomics most certainly was trumping microeconomics.
Amid all of the confusion let loose on the markets in the last few weeks
(the Fed, the Long Term Capital bailout, the dollar, treasury/corporate
spreads, liquidity), we have been tempted to take a step back and re-asses
our fundamentally positive view of the Internet sector. Further, with talk
of recession hanging in the air, technology investors have begun to question
the conceit of the New Economy and to question heretofore widely held views
(like, for example, Internet stocks can do no wrong). So if a recession is
possible in the U.S., and markets are becoming less efficient in the process
of price discovery, what of Internet stocks? What are the hidden assumptions
in our Internet business models? How dependent are the Street's estimates on
a general level of economic prosperity? As importantly, how would the stock
react to a growing desire for risk reduction in portfolios?
Lower or negative GDP growth would have ripple effects throughout the
economy, but most specifically on pricing, on demand, and on costs. The
Internet names should not necessarily be immune to these effects, but in our
view have the greatest buffer zone on each of these factors. So let's go
through each of them in succession.
Pricing. For AOL (AOL-Strong Buy), we have already looked into the crystal
ball on the pricing front and we like what we see. We challenge readers to
come up with another example of a consumer goods or services company that is
as demand inelastic as AOL; the company raised prices (from $19.95 to $21.95
in the June Q) and actually increased their retention and usage (read:
ratings). Pricing for Yahoo!, Excite, and the like, of course, is of no
concern, since they are free to consumers.
For Internet commerce players like Amazon (AMZN-Strong Buy) pricing has been
an issue from the start, since competition has created an environment where
only the lowest book pricing is possible. A recession should not create
incremental pricing pressure in their market. For Internet infrastructure
and software providers (e.g. Sterling Commerce; SE-Buy), pricing could
certainly become an issue, evidence of which, so far, is not forthcoming.
Demand. Like pricing, demand for Internet content and services provided by
AOL, Yahoo!, and Amazon should be fairly immune from macroeconomic events.
We believe the demand for Internet content (and thus traffic for Internet
media companies like AOL and Yahoo!) should remain robust in the face of a
recession since the Web presents greater utility at a lower cost than
competing media like TV, movies, or magazines. As well, since we're still
clearly in the hyper-growth phase of the Internet (60 million people today
going to 170 million in 2000), any recessionary impact is likely to remain a
small blip in a graph most decidedly up and to the right.
Costs. It is hard to make the case that Internet companies generally would
have increased costs in the face of a recession, since a large chunk of
their costs come from sales and marketing expenditures which are fairly
discretionary. Though the Street has increasingly come to view progress
toward profitability (if not profits themselves) as important, these stocks
will still be driven by revenue, since we're still in the hyper-growth phase
of the Internet as a consumer and business medium.
So if a recession per se won't impact the financials of these Internet
companies much, we are left with valuations and the Street's appetite for
risk as determinants of stock prices. September's and October's valuation
retrenchment, perhaps logical in the face of structural risk (liquidity),
political risk (impeachment), and macroeconomic risk (recession) most
certainly took the bloom off the rose in this space. But if the market
really has adopted a new view of risk, growth premiums, and valuation, which
names in the Internet universe still make sense?
There can be no denying that the Street was willing to pay a premium for
growth in the first half of 1998 (a fact that now seems quaintly obvious).
The Internet stocks benefited enormously from both fear and greed in this
regard: greed in wanting one's portfolio exposed to these names and the fear
of being left out of the party. Now, however, investors are willing to pay a
premium for safety, which clearly changes the near term dynamics of Internet
investing since these names come with the highest operational and security
risks in the market.
Joining safety as an important metric to measure is earnings, a fact made
all the more piquant by the observation that , since the end of WW II,
earnings are up 54 times for the S&P 500 and the broader market is up 60
fold. Through recessions, deflation, stagnation, assassinations, and the
like, earnings are what have really mattered.
So the real question becomes, which of the companies in the Internet
universe have the greatest earnings potential and offer that earnings stream
with the least amount of risk (read: highest safety)? In our opinion, the
Internet's three Blue Chip companies, AOL, Amazon, and Yahoo! are the most
well positioned to deliver a strong, defensible earnings stream over the
long haul. And if earnings are a key determinant of stock price appreciation
(and history certainly suggests as much), then continued execution against a
plan that does or will deliver substantial earnings should prove beneficial
to these stocks. Yahoo! just delivered remarkable evidence of that
execution; AOL and Amazon should follow with similarly strong results next
week.
Alan Greenspan, in a recent speech before the National Association of
Business Economics described the market's reaction toward the worldwide
economic troubles of the last few months, suggested "what is occurring is a
broad area of uncertainty or fear...and when human beings are confronted
with uncertainty, meaning they do not understand the rules of the terms of
particular types of engagement they're having in the real world, they
disengage." We would counsel Internet investors to remain actively engaged,
since buying opportunities in this space rarely come with any advance
warning.
September Quarter Internet Earnings
Now that we are more than halfway through Internet earnings period (by our
count some 21 Internet companies have announced their September quarters),
we are starting to see hard evidence why this sector has moved up over the
last few weeks. 14 of the 21 (or 66% of) companies that have reported so far
have outperformed expectations on an EPS basis, with the most notable
out-performance in the group coming from industry bellwether Yahoo!. This
strength has been roundly distributed in the sector, from Internet security
names like CheckPoint (CHKPF-not rated) and ISS Group (ISSX-not rated) to
Internet advertising-based models like Excite (XCIT-Buy), DoubleClick
(DCLK-Buy), and Broadcast.com (BCST-not rated) to Internet infrastructure
names like Inktomi (INKT-not rated). All have beaten numbers.
With those other Internet blue chips Amazon.com and America Online reporting
next week (Wednesday and Tuesday after the close, respectively), we
anticipate continued strength in the sector, since we believe that these
Internet companies' operating results (as opposed to investor psychology or
stock momentum) are ultimately what should drive the stocks. We believe both
our top-line and bottom-line estimates are conservative for both AOL and
AMZN, and should presage an even stronger fourth quarter, owing to
seasonally strong advertising and commerce trends in Q4 (recall that 40% of
all book sales off-line come during the holiday season). We expect AOL's
backlog of Internet advertising and commerce revenue to approach $600
million, giving the Street nice visibility on the $150 million we are
estimating in ad/commerce revenue for AOL's December quarter. We would be
buying both stocks going into the quarterly announcements.
Trend Watch
It's The Relationship That Matters
Certain human relationships transcend the boundaries of time and space; they
have a tensile strength immutable by the passing of months, a distance of
miles, or, for that matter, the confines of four new walls. Others,
lamentably, do not transcend these boundaries, but rather wilt in the face
of these pressures and take on a new profile, usually for reasons as wholly
unique as the relationships themselves.
For Internet investors, this truism is particularly germane, in light of the
importance Internet users are attaching to their online relationships with
portal companies like Yahoo!, "destination" sites like Amazon.com, and
Internet online service providers like AOL. These companies, influencers,
all, are commandeering an increasingly large portion of consumers' time and
pocketbooks, and since 60 million or so Internet users call the Internet
home for a few minutes to a few hours per day, that's a lot of extra minutes
and stray dimes. The Street, however, has had only a few tools with which to
properly measure the extent and strength of these online relationships,
which has hampered our efforts to understand the differences in the long
term value that these relationships will generate for those Internet
companies that "own" them. After all, the entity valuations of these
influencers will be a function of both the size of their
user/customer/subscriber base and the strength of their relationship with
these consumers.
To this end, we were heartened to hear Yahoo! management indicate on their
earnings conference call that they feel that the simple cost per thousand
(CPM) and inventory utilization metrics are becoming less helpful to them
and that, going forward, they would stop quantifying these measures for us.
On its face, this may seem counterintuitive: an analyst heartened by the
promise of fewer concrete data points from an Internet company? But for us,
we see it as a tacit admission that these portal businesses have, like
adolescents, outgrown the breezy fit and simple categorization of their
youth.
We eschew the relatively shop-worn view that these portal companies simply
sell advertising and that they do so on a per-impression basis.
Increasingly, the Yahoo!'s of the world are staring down multiple revenue
opportunities, including commerce, merchandising, and sponsorships, that
can't be properly understood (and valued) solely using a measure like CPM.
Our own frustrations notwithstanding, this has tended to create confusion
among merchants, advertisers, and shareholders as these constituents
contemplate partnering with or investing in any of these businesses.
We on the sell-side have been steadfastly quoting CPM and inventory
utilization (sometimes combined into one "effective CPM" figure) statistics
for the last few years. These measures became useful because they were both
simple and common among these advertising-based businesses. And since the
vast majority of these vendors' revenue came from straight search and
directory, employing these figures made some sense. Now, however, (and
increasingly in the future) the portals are deriving revenue from any number
of disparate sources, including sponsorships, commerce, merchandising,
direct marketing, and promotion to name a few of the bigger opportunities.
Not all of them are priced simply on a CPM basis.
To address this limitation, the industry moved beyond CPM and started
measuring "reach"; that percent of Web users that a portal had contact
within the last month. And though a combination of CPM, inventory
utilization, and reach has helped the Street better understand the relative
differences in these businesses value, it does have its own weaknesses, not
the least of which is that reach alone tends to treat all of the portal
players' inventory as equal, when indeed, there are substantive differences.
After all, what's to explain the difference in market caps between Yahoo!
($13 billion) and Lycos ($420 million) when their "reach" is but 9%
different according to Media Metrix. Clearly, the market is valuing some
other measure of influence than raw "reach".
So what metric gets at the strength of the relationship between the portals
and their users? Which gets to the heart of these company's influence on
Internet users? In our view, influence is a function of two factors: breadth
(e.g. the sheer number of users Excite reaches per month) and depth (e.g.
the strength of the relationship between Excite and its users). Reach has
been a helpful in determining the breadth of a portal's influence on
Internet users thanks to its commonality, its easy measurement, and its
third party verification. However, it doesn't get us any closer to
understanding the depth of these portals' influence on the eyes and ears of
the Internet population. Why is depth important? A metric that quantifies
depth will give investors a better understanding of how influential, for
example, Yahoo! is to a Yahoo! user, that is, how much Yahoo! can "guide"
that user to a certain merchant, a certain content provider, or a certain
brand message. This, in turn, will be very valuable to advertisers and
merchants. Ultimately, some measure of depth (Yahoo! management has used the
term "effective reach") will help the public markets gauge the right
relative valuations between these portal companies.
So some measure of Internet influence (both depth and breadth), when coupled
with a CPM and utilization figure, would better explain the valuations
differences between these portal companies and, perhaps more importantly,
give us insight into how those relative differences could change with time.
Recall that part of the manifest for "The Internet Capitalist" is to
identify sources of above-market returns and "determine the commonality
among them, and suggest how shareholder value will be impacted and where it
will flow." We share Yahoo!'s frustration at the uni-dimensional view
forced on us by adherence to CPM or reach alone. So that leaves us with the
prickly task of actually getting to some measure of depth of influence that
meets the three important criteria laid out above: commonality, easy
measurement, and third party verification.
Admittedly, "depth" of influence will be difficult to measure with any
precision, but for our part we think it may well have an important cousin in
usage (the amount of time spent on the site) and utility (a measure of a
consumer's reliance on the site). Intuitively, portals have already
recognized this; their efforts to date to make their sites more "sticky" to
consumers is a means to this end. As investors we are somewhat limited by
the fact that we cannot directly measure "depth", since it is a factor of
(at least) these two metrics, usage and utility. And in order to be truly
helpful to the Street, this "depth" measure would have to be common among
advertising-based business models and, importantly, validated by a third
party. Yahoo! has recently indicated that they are working with a third
party measurement player to address this need, suggesting that a measure may
be forthcoming.
So while we await some industry consensus on what measure is acceptable to
measure influence, how that metric would be measured, and who will be doing
the measuring, we anticipate further confusion on Internet investors' part
as they attempt to measure influence and the resulting financial rewards
that will flow to those portal companies with the most. This confusion
should play out over the next few quarters, but already we've got some
leading indicators (in the form of market capitalizations) as to which
companies the Street believes have influence, and which are trying to
establish it. As the process of measuring this metric unfolds, we'll
continue to wrestle with reach and traffic figures, looking for a metric
that, though lagging, helps us understand the relative valuations between
these companies.
Company Watch
America Online (AOL)
Thursday's WSJ article on the threat to AOL from broadband services
contained all the elements of distracted journalism, including a threatened
incumbent (AOL), an advancing Goliath (AT&T), a hopeful upstart (@Home), and
an assumption that all those players but one (AOL), would seize the
opportunity presented by broadband technologies. It did not, unfortunately,
contain much in the way of insight, since the broadband issue has been
kicked around Silicon Valley more than impeachment scenarios around the
Beltway.
Though the response to this line of thinking (that broadband changes the
game and that AOL may be unable to respond to the changes wrought) cannot
easily fit within this edition of The Capitalist (we'll save it for another
issue), we'll make the observation that speed is only important if there's
something on the other end of the pipe worth seeing and if there is someone
there to see it. AOL's strength derives primarily from the 15 million
consumers worldwide that call AOL their online home. Will they, willy-nilly,
pick up and leave once their cable company offers them fast service?
Clearly, no. Will AOL be able to leverage their subscriber base with
providers of broadband services or content? Clearly, yes. AOL most certainly
will not be left out of the broadband game; indeed, it is our firm belief
that they'll be driving it.
Yahoo! (YHOO)
This week, Yahoo!'s Yahoo! Finance area set a policy that requires all new
participants to supply a valid email address before posting messages.
Apparently, a few participants were abusing the environment and causing a
disruption (no examples were given, but perhaps there was a lot of cursing
when Yahoo!'s stock failed to go up after their blow-out quarter). This got
us to thinking that, as Yahoo! has expanded their community and chat
functionality over the last several quarters, they have necessarily created
the burden of passively managing the environment they've fostered. As
portals become more central to online users, the demand for them to police
their community should only increase. If this function can only be performed
by a monitor (employee), could this impact profitability? That's unclear.
For now, the margin structure should be driven by far more important things
(like S&M expenses), but it's food for thought.
Amazon (AMZN)
News late last week that Wal-Mart is suing Amazon for allegedly pouching
Wal-Mart employees raised our eyebrows. Above and beyond the central
complaint in the case (that Amazon is targeting Wal-Mart employees who have
an expertise with their proprietary distribution, data warehousing, and
merchandise management system, Retail Link), what we are witnessing is no
less than Goliath stoning David. Wal-Mart, with 825,000 employees, is 730
times the size of Amazon, with 1,130 employees and is 230 times as large on
a revenue run rate basis ($125 billion versus $540 million).
When combined with Bertelsmann's comments that "Amazon is a heavyweight,"
and that "we [Bertelsmann] have a good position now to start tough
competition.", you'd think Amazon was causing these companies real pain.
Though we never take a lawsuit for granted (having learned our lesson in
1994 with Microsoft), we tend to take a glass half full approach to this
suit, insofar as it reinforces our view that Amazon is changing the very
face of retail (a concept we have spoken frequently about and we embody in
the phrase that "online retailing is different"). If companies as large as
Wal-Mart and Bertelsmann are starting to understand the power of the Web and
of tiny little Amazon, we can't believe the Street's understanding of the
same won't become more clear soon.
Excite (XCIT)
Excite adopted a stockholder rights plan this week, to be triggered when any
entity holds greater than 15% of the company, ostensibly to protect itself
from any unsolicited acquisition attempts going forward. We can only hope
that the move is pro-active and not reactive, considering the source of the
last unsolicited acquisition offer Excite received.
Excite also teamed with SportsLine USA (SPLN) this week to offer Excite
users SportsLine content on the Excite Sports by SportsLine USA channel.
Financial terms of the deal weren't discussed, though the deal is multi-year
and will leverage Excite's sales staff, insofar as they will sell all of the
traffic inventory produced by the channel. Good for Excite in that they get
to offer better Sports content and can enhance their service; good for
SportsLine in that they get exposure to a badly needed new revenue stream
(recall that SportsLine pre-announced their September quarter and missed the
Street's revenue expectations).
Sterling Commerce (SE)
Amid the confusion caused by Harbinger's (HRBC-not rated) pre-announcement
of its September quarter results back on October 1st, Sterling's stock fell
from $32 to $20 in misplaced sympathy, forcing Sterling, for the first time
in its history as a public company, to pre-announce positive results. In a
great example of delayed reaction, the stock took two full weeks to catch
back up to its $32 level, posting a >50% move from its $20 low over that
time frame. We used to call Sterling the most stable stock in our universe,
an accolade we'll now have to re-think.
Observations
A Slowdown In Traditional Media Advertising?
Over the last few week's we have watched as various traditional media
concerns warned the Street that their advertising revenue could be slowing,
in some cases significantly. A few week's back, Dow Jones warned the Street
that it's advertising revenue would be lower than expected thanks to
pullbacks in financial advertising (deal tombstones are drying up); then
came Ziff Davis' turn. The big publisher of PC and technology trade rags is
laying off 10% of its work force, dropping three publications, and taking a
$50 million charge. We have received several queries over the last few weeks
about this trend and, by extension, its potential impact on Internet
advertising-based business models.
We tend to fall in the less-concerned camp on this one, for a few reasons.
First, the Internet remains structurally advantageous to traditional media
advertising; Internet advertising is still more measurable and target-able
than traditional forms of advertising, making the ROI not only higher, but
measurably so. If budgets are to be cut, those cuts invariably come from
either (1) non-"core" advertising or (2) campaigns whose ROI is questionable
or non-existent. Second, we're still talking about small potatoes here;
$112 billion (at 6% y/y growth) will be spent in all advertising media in
the US in 1998: the Internet could account for something like $2 billion
when all is said and done at the end of this year (with that figure double
1997's $1 billion in Internet advertising spending).
Given the absolute size of Internet ad spending as well as its growth rate,
we're hard pressed to come up with a scenario that would cause a meaningful
dampening of Internet ad spending over the next several quarters. And though
we will maintain a watchful eye toward traditional print media advertising
conditions, our initial reaction to Dow Jones and Ziff Davis' woes was
rather ho hum.
And though print media advertising may be slackening, we have at least one
data point to suggest that cable TV advertising will hold its own. Who's to
argue with Gerry Levin, Time Warner's CEO, who thinks that his cable
business is recession-resistant and that his networks would fare well in a
tough economy because they represents a "better buy" to advertisers than
network television. Switch "Gerry Levin" with "Bob Pittman", "cable
networks" with "online service", and you can understand why we're so happily
bullish on AOL.
Valuation Watch
Internet Boom Meets Internet Backlash...Meets Internet Quasi-Boom?
"Every day I wish I was in cash" comes a quote across the wire a few weeks
back, amid the bloodletting of margin calls and the unwinding of large bets
on sundry treasury or currency instruments at hedge funds. These events,
though considerably distanced from the process of picking Internet stocks,
have nonetheless impacted this sector (as discussed above in "The Week"),
causing some wild price gyrations day-to-day and week-to-week. And though
the process of price discovery and capital formation may be bruised and
wobbly, it is by no means down for the count, as evidenced by the return of
some order (read: advance) to the prices of Internet stocks. The leaders in
the sector, AOL, Yahoo! and Amazon, are up 30% or more from the lows reached
over the last few weeks, (with some others up more than 50% off their
bottoms), suggesting the Street has regained comfort that these stocks don't
go to zero in a tough economic or valuation environment and have for now,
found a floor.
One can sense the level of frustration (or jubilation if one was short) for
Internet investors over the last several weeks as these stocks succumbed to
a deflation all their own, then moving boldly upward at the Federal
Reserve's surprise decrease in rates. Coupled with this more benign
environment, however, Internet investors have been able to concentrate on
these company's underlying fundamentals over the last 10 trading sessions.
Because September quarter earnings have been so strong (66% of Internet
companies have had positive surprises), the Street's fears have been
allayed, allowing more aggressive bidding to creep back into these stocks,
most especially in the leaders of the space, AOL, AMZN, and YHOO. We'll
wait to see how AOL and Amazon report this week (our bet is they will have
great quarters), but it's becoming more apparent that Internet companies'
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