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Technology Stocks : Overture (OVER) formerly (GOTO) -- Ignore unavailable to you. Want to Upgrade?

To: StormRider who wrote (339)	2/25/2003 4:39:47 PM
From: Herschel Rubin	Respond to of 429

The key paragraph from TheStreet.com's article: Ethan McAfee, an analyst at Capital Crossover Partners, said that following Tuesday's drop, Overture's stock "is looking much more attractive." McAfee said he had no current holdings in Overture, though he has invested in the company in the past. "Five years from now, the [search] market will be five times what it is today," McAfee said. "The current valuation probably doesn't reflect that adequately." OVER is going to get a short-covering bounce tomorrow to at least $16.50. The March $15 Calls will go up 50% on a move like that. EZ Money.

To: StormRider who wrote (339)	2/25/2003 6:24:08 PM
From: Ryan Bartholomew	Read Replies (1) \| Respond to of 429

The bottom line is that Google was lacking what Overture had, so they added paid listings. Overture was lacking what Google had, so now they have just added algorithmic searches. The big properties are secured, so now all that is left to see is who can do a better job at it. Both companies have their strengths, but as I pointed out before, Overture has the edge in that the nature of their listings command higher average bid prices. Google's "wildcard" system does save money on the cost end of things (hiring people to process term relevancy, etc) but it also results in less value per click for the advertiser. I speak from vast first-hand experience on this one. Regardless of which company "wins", there is room for both. As the analyst in the Street article points out, the importance of search technology is only going to continue to explode over the coming years. It is THE way that surfers find what they want... there really arent many viable alternatives. Unless you thing "this web thing" is a fad, the only logical conclusion is that more surfers and more reliance on the internet will mean a continued boom in search revenues. The PPC model is expanding even more rapidly internationally, and Overture has a great foothold there. Earnings may be modest (75 cents or so) for 2003 (which by the way, is only a PE of 20 or 25... not high at all for a growth company), but in 2004 and beyond when the acquisition of these new engines will be accretive to earnings, you should see earnings of $1.50+. This isnt that far off and while it is not certain, it is likely enough that OVER would be fairly valued around 30 right now. I will be shocked if investors dont sober up and realize these recent announcements are actually GOOD news and cause a rebound in price for the remainder of this week.