Henry Blodget Growth Quotations

Near-term, in a market environment in which investors are fleeing to quality, its stock could continue to do well. Our analysis, however, suggests that the company's long-term earnings growth is likely to be slower than the 15 percent to 20 percent consensus.

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.

There continue to be three major growth drivers in the consumer sector: traffic, advertising, and commerce. Traffic growth in the U.S. continues to slow, as more than 50 percent of the total market is already online. More importantly, we estimate that more than 80 percent of disposable income is already online.

The big question mark remains the long-term sustainable growth rate, especially with continued deceleration of U.S. business.

The majority of AOL's profits are derived from its pure advertising and commerce revenue, so strong sequential growth in this line is critical to the long-term growth story.