Henry Blodget Quotations

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

We remain enthusiastic about eBay's business model and market leadership position.

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.

Settlement talks, if any, will likely be very complex, with multiple parties involved.

Since one of these possibilities would be negative for the stock (earnings miss), two would be neutral, positive, or negative (acquisition, management change), and one would probably be positive (takeout / strategic investment), it is hard to know what the impact on the stock might be.

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.

Near-term forecasts call for pain, especially in the travel sector.

If any mega-merger of this size can work, this one can.

Given what these stocks have done, the people who are left behind start looking for other opportunities.

If the talks proceed well, it is possible the case could be settled by the end of the year.

We can imagine an aggressive case calling for $2.7 billion of revenue by 2005 and $2.34 in earnings per share.

Our preliminary conclusion is that, although Microsoft is not out of the woods, it will be slightly more free to compete on its own terms than we expected it would.

While the combined entity will have a large global footprint, we think cultural and managerial integration of the two companies could pose a challenge longer term.

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 think some upside is possible to these estimates, despite weakness in the online advertising market. We are not looking for as much upside as in the past, however.

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.

Thus, we regard the ruling as an incremental positive for the stock.

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 contend AOL Time Warner is powerful enough that it won't go gently into the night (unlike Novell, WordPerfect, Lotus, Netscape, et al). We do believe, however, that developments between the two companies over the next year or two will have significant bearing on the long-term direction of the industry.

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.

We think the Internet is tremendously profound. It will continue to have an effect on the global economy over the next five-to-10 years. But there's no way that it is a large enough opportunity to support the 400 companies that have gone public. And I think if you look back in history at different emerging industries, we've often had this feeling that the PCs for example are going to change the world. All you have to do is buy a PC company and you're safe. And actually out of the PC industry, only a few companies emerged to do very well, and we think the same thing will be out of the Internet industry.

We are simply exhausted by the endless postponement of financial gratification - and we think other investors are, too.

With paid search, advertisers bid against each other for rank positioning on commercial search terms, paying each time a user 'clicks' on their result.

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.

We expect the challenging environment for online advertising to continue into the second quarter 2001, three-to-six months longer than we had originally expected. Because of this, we are not able to raise our bottom line estimates.

We continue to view OXP as a 'nice-to-have,' not a 'must-have,' especially in a weak economy. We have therefore baked only modest impact from the launch into our estimates.

Every hour that the average user spends online, AOL pays for it directly, yet the average user only pays a flat rate of $21.95 a month. So if usage continues to go up, AOL's cost continues to increase and this is something they've started to control over the last several quarters.

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.

After re-analyzing Amazon's cash and liquidity, we remain comfortable with it. Amazon needs to stay on track to turn an operating profit in Q4, but as long as several key trends continue to improve, we consider a squeeze very unlikely.

Street analysts tend to aim low, especially when they like a stock.

Despite the awful near-term financial outlook, the key value-drivers showed impressive growth.

AOL seems undervalued by almost any measure. If any mega-merger of this size can work, this one can.

A settlement as broadly described would represent a positive for the company and stock. Importantly, however, the states have reportedly not yet signed off on such a settlement, and without their support, the case will likely still head back to the district court.

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

...This consolidation and shakeout in the space will continue for the next few months but longer-term will bode very well for industry leading companies like Amazon.

It looks like a bubble, but the underlying trend is too powerful to ignore.

The biggest challenge AOL faces is really controlling its usage-based cost structure.

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.

After that point, it is likely that the case could be appealed to the Supreme Court, which could add at least another six months to the outcome. So the case may not conclude until 2003.

At the same time, however, we continue to be discouraged by one basic trend: a steady increase in our loss estimates without a correspondingly large increase in revenue or profitability estimates.

In this market, you have two choices. Either you sit on the sidelines or you say you want to be in companies that you feel comfortable with.

I could see Amazon and eBay merging. Amazon operates in a huge market, but it's got lower margin revenue. eBay has higher margin revenues, but the secondhand and small-business markets will always be limited relative to the size of the retail market. Combine the two, though, and that could be a very powerful entity.

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.

The majority of today's pure-play Internet companies will never make money and will not exist in three-to-five years. There will be a lot of consolidation and a lot of failure, and ultimately valuations will fall more in line with historical norms.

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.

It's all about who your team is and who your people are.

The content defines the platform, so whereas when I was working at ABC from '66 to '76, people said it was the "great wasteland." It was the least-objectionable program that succeeded. It was, if you could get behind "All in the Family," you were successful.

Television is like the movie business. It's not the least-objectionable program - it's the best program that gets positioned. Same in the movie business. It's not just everything automatically gets done by the "in" crowd.

Television is not hurting. Television is in fantastic shape. It's just a golden age for other people.

It's very hard to be good. It is self-destructive thinking to think that there is too much good.

There's too much bad. The worst is mediocre. Bad is easy. There's high quality, there's pornography, and then there's bad.

Pornography works to a degree, high quality works, bad is obvious. Nobody goes for bad. The terrible middle ground is the mediocre. That was kind of the essence, in a way, of broadcast television when there were only three channels.

Some people have made a fortune by being employed. Jerry Bruckheimer does not own his content. Warner Bros. owns his shows. They are on CBS, and he makes a fortune.

This sounds crazy, I know, but you can make a billion dollars - very few people do - but you can make a billion dollars on a product. It can be "Lion King," it can be "Simpsons," it can be "Family Guy," who knows what it is. Or you can make zero. But you can't make a billion dollars if you don't own it.

People don't have to go to cable news or network news. Live sports is the one of many things that's kind of community television. There are a lot of people who still tune in to "Sunday Night Football" or "Thursday Night Football" the way they did before.

I think the water cooler is more important than ever. "Oh, did you hear that 'Inside Amy Schumer' is fabulous?" Where do you find it? It's on Netflix, it's on iTunes, it's on places nobody ever heard of five years ago.

The first reaction is, get defensive. Second reaction is, what are we going to do about it?

The tech folks have seen WiFi as the way to untether. And what better reason to untether than entertainment content? So there's nobody better positioned than the in-home Wi-Fi purveyor.

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

Everything I have is a private company. And even though a public company's a great thing, it's great for financing and all of the stuff you need to do. I'm not answering to anybody but my wife and my children and the people who work for me, and my partners.

Some things go slow, slow, slow, and then - wham! - they're over.

Almost any show that has reviewers behind it, Rotten Tomatoes behind it, will find a way to survive.

People have been predicting the death of television for 20 years now, and so far it's been entirely wrong. But it does seem viewership habits are starting to change.

In the era of networks only, I cannot tell you the number of shows that we don't know about that did not survive. They got canceled. But there are a few that survived by accident, because they didn't have anything else to do, and they stayed with it.

When television came in, everybody thought that was the end of the movie business, which was not and is not.

[T]here's a difference between confident leadership and empty-headed delusion or cheerleading. And this is a difference that many CEOs miss.

Arrogance follows distribution strength.

Digital advertising is now larger than TV.

I'm no expert in vibrators, but I was surprised to learn that one could fit in that little box.

The definition of strong leadership is not about making decisions that are popular. Making popular decisions is easy - you don't need to be a leader to do that. The definition of strong leadership is to make decisions that are unpopular, but are nevertheless sound.

The environment continues to worsen versus our expectations, and we continue to think the seasonally weak first quarter will be the toughest quarter in terms of year-over-year growth. We also continue to expect the market to strengthen in the second half of the year, when the impact of the dot.com bubble has worked its way out of the system.

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.

All these stocks work in waves. What goes up fast can easily go down fast. But the people who are putting money into K-Tel aren't looking for numbers, but they are playing a stock that is on fire.

The good B2B stocks are dizzyingly expensive, but we would rather pay up for them than look for cheap stocks of poorer companies.

The company believes in one service with multiple devices...the proliferation of devices could actually be a demand driver for broadband due to the cost of additional phone lines.