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Technology Stocks : Internet Analysis - Discussion -- Ignore unavailable to you. Want to Upgrade?

To: jhg_in_kc who wrote (216)	3/13/1999 11:52:00 AM
From: Chuzzlewit	Respond to of 419

jhg, thanks for an interesting article. The article explained rather nicely how internet stocks are priced but the basis was not very illuminating. A close reading shows that the proxy PSRs really depended on gross profits. So the article was more of a rationalization than a rationale. I expect that the economic profits for most of these companies will never materialize or when some profits do materialize there will be a sudden realization that earnings have not lived up to expectations. To be sure, internet companies have certain undeniable advantages over their physical counterparts. Printing presses are replaced by servers and paper by ether. Furthermore the capacity of internet advertisers to carry additional messages is not the constraint that currently exists for television. Perhaps the way to look at the issue is in terms of total advertising dollars and market share of this total. How much money is spent annually in advertising? How much of this can be expected to be funneled into the internet portals? At what rate can we expect advertising to grow? I suspect that Mary Pugh is the best one to answer these questions. TTFN, CTC