Not necessarily my opinion, but FWIW...
What Internet stock bubble? Analysts stay bullish
ReutersPlus, Tuesday, April 27, 1999 at 18:38
By Andrea Orr
SAN FRANCISCO, April 27 (Reuters) - Who says Internet
hysteria has gotten out of hand?
Not the technology leaders and analysts gathering for the
industry's biggest annual conference here.
They are giving some of the rosiest forecasts yet for the
Internet sector, saying that far from being concerned about
inflated stock prices or consolidation, they have new reason to
expect stock prices to keep climbing and the number of Internet
companies to multiply.
"There will be explosive, viral growth," Hambrecht & Quist
Internet analyst Daniel Rimer predicted during a panel
discussion on Monday at the start of the four-day technology
conference his company is hosting. "There will be an incredible
wave of new companies that are just emerging. We're moving into
a much more connected world."
The Hambrecht & Quist conference is showcasing a record 315
high-tech companies to some 3,200 institutional investors and
analysts in attendance.
Many of the Internet companies making presentations are
drawing standing-room-only crowds, prompting Yahoo!
Inc.(NASDAQ:YHOO) Chairman Tim Koogle to remark on Monday that it
felt more like a rock concert than a business forum.
But after a year when the prices of several Internet stocks
rose 10-fold and millions of people migrated online, how could
this level of growth be sustained, let alone accelerated?
The answer, say some of the analysts who follow the sector,
is Internet appliances.
While most people still access the Internet from their PCs,
a host of gadgets and appliances ranging from cell phones to
pagers are being connected to the Internet, which Rimer said is
fueling a new wave of growth for the industry.
These "smart appliances" have been the talk of technology
fans and visionaries since the earliest days of the Internet.
Now they are becoming a consumer reality.
Paul Noglows, another Hambrecht and Quist Internet analyst,
said consumers can expect within the next year to see devices
like cell phones that connect to yellow-page directories,
pagers that send personalized news flashes on stocks, and
hand-held organizers that enable you to buy and sell stocks
without going near a PC.
For Internet companies, this means new business challenges
that could open lucrative new markets.
Companies that provide content to Internet services and
search engines will have the opportunity to package more
specialized content for different appliances.
Other opportunities for software and hardware makers will
lie in finding new ways to deliver content to small devices
with limited memory, display space, processing power and
battery life.
"We really do believe the trend is all about the Internet
permeating more than the World Wide Web," said Rimer. He
projected that by 2000, the use of smart devices would surpass
PC penetration. By 2002, he predicts, some 55.7 million devices
will be shipped, almost 10 times last year's 5.9 million.
"Content providers know that this is the opportunity going
forward," added Noglows. "If you go to AOL (America Online Inc.
(NYSE:AOL) or Yahoo Finance six or eight times a day to check your
stock prices, wouldn't it make more sense to pay those guys a
buck or two a month to get that same information downloaded to
your pager?"
There are several factors, like privacy concerns, that
could threaten to delay that progress. But few of the ebullient
investors at the conference seemed worried, even after Elliot
Maxwell, the U.S. Commerce Department's Internet guru, laid out
a long list of issues from privacy to tax policy and access to
bandwidth that he said threatened to slow the runaway growth.
"Now there's an enormous sense of possibility of the
future, but unless we have an environment where people feel
safe and secure, these growth rates aren't going to take
place," Maxwell, special advisor to the Secretary of Commerce
for the Digital Economy, told the conference.
Still, even Maxwell expressed a desire to avoid restrictive
regulations that could put an end to the robust economy the
Internet has helped fuel. "No one wants to do anything but
encourage (e-commerce)," he said.
If there were one admonition in the midst of all the
buoyancy, it was that the industry was evolving so fast that
not even today's leaders would be guaranteed a role in
tomorrow's Internet landscape.
"Perhaps the true industry transformation hasn't occurred
yet," said Genni Combes, a Hambrecht & Quist Internet analyst
who follows online retailers.
"Amazon.com (Inc. (NYSE:AMZN)) has created tremendous
incremental demand for books. But maybe authors will eventually
want to reach their readers directly."
Copyright 1999, Reuters News Service
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