The Internet Capitalist
SG Cowen Internet Research
13
marketers and their agencies have championed
this approach for years and the Internet has
provided abundant opportunities for such
individuals (resumes most in demand have
direct experience all over them). Many
marketers are trying to figure out ways to
maximize their online spending today; while
anxiously awaiting the arrival of broadband -because
its more like TV. This week BBDO, a
large advertising agency with a client roster
that includes Visa, Pepsi, M&M Mars, GE and
the Navy, announced its use of AdMaximize, a
closed-loop ROI tracking system. [Full
Disclosure, part of The Cowen Internet
research team is a BBDO alumnus]. This
announcement, following DoubleClick's earlier
introduction of DART for agencies, along with
P&G's FAST summit this summer, solidifies
an industry-wide move toward accountability
on the Web. Hopefully, 1999 will be the year
this idea gets widespread use (read: spending)
instead of lip service. Because after all,
accountability is credibility.
Valuation Watch
“Be silent, wretch, and think not here allow'd,
that worst of tyrants, an usurping crowd”
Homer, The Iliad
Just when you think the Internet space has
reached its apotheosis, its fin-de-siecle best,
along comes another (not small) leg up in the
stocks, which, as sure as spring follows winter,
always seems to cause more derision from the
short crowd seated in the rear, with increasing
venom on each new high (or low, depending
on your perspective). Much of the Street's
responses range from a comic confusion to
outright disdain, with an increasing element of
disgust.
This level of emotion, we thought, cannot be
sourced simply from the opportunity cost of
not owning these stocks, of missing a 5, 10, or
15 bagger in either AOL, Amazon, or Yahoo!
(or a host of others, for that matter). No, anger
of this depth must have roots that run deeper
than envy. We think we may have a clue,
One thing we all can agree upon is that the
Internet is a democratic and participatory
medium; the lowliest voice can (in theory)
have as much reach and influence as the
loftiest. One of the first such examples of this
phenomenon came when TWA Flight 800
went down off the coast of Long Island.
Within days, the missile theory (that a friendly
fire missile caused the crash) was circulating
via the Internet, only to be picked up and
circulated massively by traditional media
outlets. Voila, instant credibility.
Many of us on the Street have spent
considerable time figuring out which
companies and industries benefit from and are
harmed by the Internet. Most of us have given
little thought to how the Internet changes our
business; how the Internet is re-shaping the
Street and forcing us to alter the practices of
how we analyze investments.
Historically, the Street has always been a
clubby industry and, up until the last decade
or so, tough to penetrate; information flow was
pretty restricted to buy and sell-side analysts
and the economics of trading made small order
execution (<100 shares) prohibitive. Further,
we on the Street all shared an intellectual
common denominator in the form of the
academic foundation upon which all
investment analysis has been based for the last
few decades. Whether one clung to Graham
and Dodd, Miller-Modigliani, or Black-Scholes,
we all tended to believe that securities and the
markets that trade them do so efficiently and
according to well-defined rules of engagement.
One of the first things you learned in this club
was that stock splits didn't impact stock prices,
that the pie was just being cut up into a
different number of pieces, but the pie was still
the same. Indoctrination of the many other |
