2007 saw Internet companies outperform the broader stock market,
as the HHH rose ~14%, vs. a ~5% rise in the S&P 500. We believe
some of the factors that drove F’07 outperformance will persist into
F’08, and thus expect the sector to outperform the broader market.

• Expect 34% EPS Growth, vs. 8% for the S&P 500. We expect
revenue growth to decelerate to 21.2% in F’08, from 25.6% in
F’07. We are projecting 34% earnings growth for our coverage
universe, compared to 8% for the S&P 500.

• Expect Blended CPM Pricing Growth Rate to Accelerate. We
think blended CPM pricing bottomed out in F’07. We expect
tighter offline inventory and better monetization techniques will
lead to a re-acceleration of growth in F’08.

• We Project Global Search Revenue to Hit $60B by 2011. We
are raising our F’08 global search revenue estimate to $30.5B,
from $26.2B, driven by strong volume trends, better-than-expected
monetization, and continued robust growth in Continental Europe.
We expect the global search market to reach $60B by 2011,
growing at a 28% CAGR over the next four years.

• Global Consumer Growth Should Benefit Internet Companies.
World GDP growth has outpaced US growth in recent years, and a
projected 3-year CAGR of 6.5% for emerging economies means
hundreds of millions of new consumers. We think large Internet
companies’ global reach means they’ll benefit from this rising tide.

• M&A Market Likely to Remain Healthy. The five biggest
companies in our universe generated $8.8B in FCF in F’07, a
number we project will grow to $12.5B in F’08. While some of
that cash should continue to fund share repurchases, we think a
significant portion of the incremental cash flow is likely to lead to
continued M&A in the sector.

• Top Picks. The above trends translate into our top Overweight
ideas going into the new year: GOOG, YHOO, EXPE, OMTR,
SFLY and MNST.

 

[此贴子已经被squarekiss于2008-9-1 9:41:33编辑过]

fuguitop  金钱 +10  好文章 2008-8-31 20:52:47