Henry Blodget Believe Quotations

The online advertising market appears to be stabilizing, but we believe it will continue to remain challenging for the foreseeable future.

We would therefore remain cautious about adding new money to online advertising-driven stocks until the first or second quarter, when we should have better visibility. We continue to believe that the first quarter will be the toughest quarter, with only 10 percent year-over-year growth.

We have received a number of calls on whether a combination of Yahoo and Disney would make sense. We believe an investment would be much more likely. Given that AOL-Time Warner is likely to be a real entity within a few weeks, creating a very strong global integrated media and Internet competitor, we believe other media companies will be looking to create similarly powerful internet strategies.

While we still believe the model is compelling long term, the business continues to be heavily dependent on airline ticket sales. As a result, it appears management has limited visibility to accurately forecast the business.

We continue to think there is long-term upside potential for the stocks of the leading companies in the Internet sector. Although we acknowledge the potential for appreciation over the intermediate term, we strongly believe that volatility remains a significant risk over this same timeframe and we would stress the long term.

We continue to believe Yahoo! will make a good long-term investment. As a result of the challenging advertising environment, however, we believe the stock could see significant downside in the next three to six months.

We continue to believe that there is no legal or competitive justification for blocking the deal.

We continue to believe that the first quarter will be the toughest quarter for online advertising. We expect market growth of only 10 percent year-over-year. We believe growth will then accelerate modestly through the year.

We continue to believe in the long-term growth of online advertising. Near-term, however, we don't believe the market will bottom until the first quarter. We estimate only single-digit year-over-year market growth in the first quarter.

We do not expect significant upside to our estimates. As we have said before, we believe the company is going through an awkward transition from a hyper-growth, revenue momentum story to a long-term growth and earnings story. Despite its growing pains, we continue to believe long-term, patient investors will be rewarded.

We believe there could be a shakeout in the B2C (business-to-consumer) online retailing sector as companies that have had to spend aggressively to gain new customers will be running out of money.

We still believe that, over the intermediate term, these factors will likely outweigh controversy surrounding Windows XP, so we maintain our 'accumulate' rating.

We believe AOL and Time Warner are in the final stages of gaining approval from U.S. and Europe regulatory commissions. We do expect any concessions that would materially impact future performance.

We believe the comments on PC demand add weight to the view that the PC cycle may have bottomed. However, we believe it is still too early to 'call the bottom' -- especially if emerging weakness in European IT demand dampens prospects for a PC rebound there.

We also believe that some analysts are projecting that the company will miss the low end of the guidance range in Q3 and withdraw its goal of operating profitability in Q4. As a result, if the company hits the mid-point of the guidance range and reaffirms Q4 operating profitability, we would expect the stock to go up.

We also believe such controversy, if any, would come at a poor time for Microsoft, given that the company is awaiting the Appeals Court ruling on the existing antitrust trial. As a result, we believe it is possible that this could put a damper on the positive sentiment surrounding the stock.

As the shakeout continues, we continue to believe that the Internet spoils will go to the few, not the many. As one investor we respect put it, anytime a new industry emerges, many turtles hatch, few make it to the sea.

The timing of this reset relative to the current stock prices is, again, not a prediction of future weakness. In fact we believe that many of the stronger stocks may be near seasonal bottoms.

Our estimate for fourth quarter product revenue is approximately $1 billion. To achieve our estimate, we believe Amazon has to book about $750 million in the eight week holiday season. Our back-of-the-envelope analysis of the Delight-O-Meter suggests it is off to a solid start.

The sentiment surrounding the leading companies in the consumer Internet sector appears to be improving as we approach the seasonally strong fall and winter period. We continue to believe that some of the leading consumer advertising and e-commerce stocks -- America Online, Yahoo, and Amazon.com -- will benefit from this.

However, if the company is successful, we believe the cash burn can start to decline significantly in one to two quarters and can last CMGI through break-even.

You have to have a business model you believe in and like.

Although a settlement as described would be positive for the company, we believe it would be premature to conclude that the company's legal issues are behind it.