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To: ms.smartest.person who wrote (108)	1/18/2001 5:09:39 PM
From: ms.smartest.person	Read Replies (1) \| Respond to of 2248

Fighting Through the Gloom Fourth-quarter forecasts by major players have brought back the ghosts of April to haunt the net economy, with predictions of doom and gloom being the general consensus amongst analysts. By Ronda Field Amazon was first off the mark, with chief executive Jeff Bezos lacing the company's preliminary results with a generous helping of hype, a trait not displayed by analysts who had envisaged Q4 sales landing around the $US1 billion mark. The figures fell at a hefty $960 million, which was within Amazon's own sales target, and up 42 per cent from the previous year. However, the margins set off alarm bells for market watchers who became nervous at the bellwether's stumble. Still, Bezos was decidedly upbeat about the results. "We are very pleased that we not only met our goals for the top line but we also met them for the bottom line, too," he said. "We were operating in the softest fourth quarter in four or five years." Similarly, Yahoo put on a brave face to the public when they released its fourth-quarter results and less-than-spectacular forecasts for 2001. Although earnings per share met analysts' speculation, coming in at 13 cents, Yahoo could not brandish its forecasts with a similar fervour. Identifying a slower advertising spend as a contributing factor, Yahoo estimated that pro forma earnings would slump to 4 to 7 cents per share on revenue of $220 million to $240 million in the first quarter. The announcement unnerved shareholders with a swift 20 per cent drop in Yahoo stocks. Once again we saw the justifications spilling left, right and centre, with CEO Tim Koogle declaring that "Yahoo continued to outperform the industry and took market share despite a challenging environment". Locally, Australian managing director Tony Faure echoed these sentiments, saying that "in a pretty difficult climate we are pleased to be able to deliver results within expectations". In response to the shortage of advertiser dollars, Yahoo is looking to expand upon its business and corporate services as well as increasing the number of 'paid' services on offer. Yahoo's announcement went on to affect the price of DoubleClick shares, despite the latter company announcing that it had beaten its fourth quarter revenue expectations. Notching up an admirable $US132.3 million worth of revenue for the period, the result still fell short of analysts' early predictions that indicated a sum of $140 million. DoubleClick reined in expectations during December, citing a revised target of between $126 million and $129 million. As analysts restructured their forecasts, DoubleClick restructured its workforce, announcing it would lay off 100-150 employees. Again, a slow advertising spend was highlighted as a contributing factor, with it having a particularly strong effect on the 25 to 30 per cent drop projected for DoubleClick's Media business. The company's Data and Tech units, however, are anticipated to grow at a rate of 20 per cent and 30 to 35 per cent respectively. The lukewarm prelude to DoubleClick's Q4 results was again held up as a litmus test for the company's resilience, with CEO Kevin Ryan boasting, "I am very proud of how well our organisation executed in a tough industry environment." Nowhere near as optimistic were the crowd over at internet directory LookSmart, who similarly backed up a shortfall in quarterly revenue with a bevy of layoffs. The 172 layoffs worldwide are estimated to save around $US44 million for LookSmart, which warned that its results could fall up to $6 million short of projections. Although speculation centred around a figure between $33 million and $36 million, LookSmart announced that it would in fact be more like $30-31 million. Following the announcement, the company's shares sunk 15 per cent to their lowest ever price of 21.5 cents. The song of slow ad spend was sung once again, and in a similar fashion to Yahoo, LookSmart intends to focus on new channels of revenue, with particular interest in "highly targeted online direct marketing", according to CEO and founder Evan Thornley. Deutsche Bank's David Lowe believes that although the year will get off to a dismal start, it will help identify those companies that are in it for the long haul. "I don't think the doom and gloom is going to go away in a hurry. I think the first quarter is going to be very difficult, there's no question that online advertising revenues are being predicted by analysts as being flat at best," he said. "I think the business models that are effective and reasonable are bubbling to the surface and the companies that are going out of business are the companies that had unsustainable business models," Lowe said. He was fairly certain that the figures were merely a storm in a teacup for the big players, saying that the likes of Yahoo and DoubleClick have sustainable business models that will see them weather any storms that may hit the net economy in the near future. thestandard.com.au