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Technology Stocks : PALM - The rebirth of Palm Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Tim McGee who wrote (4213)	3/15/2001 3:54:15 PM
From: opalapril	Respond to of 6784

(OT) Parking - and praying Google doesn't give in. Google Searches For Dollars Marcella Bernhard, Forbes.com, 03.15.01, 3:00 PM ET forbes.com SILICON VALLEY - Phase one: Develop a cultlike following of users, including journalists who extol your service. Convince giant Yahoo! to throw over its search engine provider and hire you instead. Scare older rivals like AltaVista into copying your look. Internet startup Google has done all that. But phase two, in which Google turns its popularity into profit and goes public, is going to be hard considering that the company derives half its revenue from advertising sales. These days that's a recipe for disaster, especially on the Internet. Google couldn't help but feel a chill last week after Yahoo! (nasdaq: YHOO - news - people) disclosed that the slumping advertising market was forcing it to lower expected sales figures for the second time and bid farewell to Chief Executive Timothy Koogle. Yahoo! gave Google its first big break when it tossed Inktomi (nasdaq: INKT - news - people) last summer and hired Google to power its search engine. Although Google says Yahoo!'s bad news doesn't affect their deal, Yahoo!'s troubles show just how hard it is to make a buck on the Internet these days. Google President Sergey Brin counters that the company's method of selling advertising is just as savvy as its supersmart, superfast search engine. Instead of blanketing its site with banner ads, which has proven to be highly ineffective, Google sells text-based ads which are clearly separated from search results. The ads appear above search results and display related services when users search for information. This more targeted advertising means a respectable 2% of users "click-through" to advertisers' Web sites, compared to a miserable 0.5% click-through rate for most online advertising. Even as companies cut back on their advertising, they are redirecting money to the ads that get the best results, which Brin says is helping Google. "With the dot-com shakeout, that's what's being valued," says Brin. "We're getting a much larger proportion of advertising dollars [than competitors]." Licensing its technology to other Web sites currently gives Google the other half of its revenue, with this aspect of the business becoming more important than advertising sales. In addition to the high-profile deal with Yahoo!, Google has 149 other corporate customers, including The Washington Post, Virgin, Cisco Systems (nasdaq: CSCO - news - people), Netscape and Palm (nasdaq: PALM - news - people). Brin believes that revenue from search services can make the company profitable this year. "If Google can develop that business, it can isolate them from the advertising downturn," says Danny Sullivan, a search engine analyst in London. But to make a profit, some industry watchers think Google will have to toss its prized integrity and tailor some of its search results to favor companies willing to pay for better placement--like most of Google's rival search engines. Google says it has no plans to go that route, but Sullivan says it's inevitable. That might help the company rack up some short-term deals, but it would be a huge mistake for Google, which has become one of the best-loved features on the Internet precisely because of its unadulterated efficiency. Google's no-frills Web site helps its search engine return results with enormous speed. With almost no advertising of its own, Google has grown to be the fourth-most popular search engine on the Web, according to Media Metrix, and it handles more than 40 million searches daily. But popularity won't pay the bills--unless Google can keep convincing other sites to join its clique. "It will be interesting to see, when these contracts start coming up, if Google's reputation will be strong enough that people will still want it," says Sullivan.

To: Tim McGee who wrote (4213)	3/15/2001 5:43:19 PM
From: sportsman	Read Replies (2) \| Respond to of 6784

Tim, Let's all put forth our best guesses for earnings, revenues and effect on stock price from the forthcoming earnings release. I will begin: Revenues: 435 million Earnings:1cent My reasoning is not as scientific as others on this board. I'm basing my guesses on the very weak January that Palm experienced, a very weak economy and very weak flash memory sales. I believe Palm could easily trade as low as $10-12 after the earnings release. Good luck, Sportsman