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Cramer's 'Mad Money' Recap: Three Dot-Coms for Right Now

TheStreet.com Staff

Click here for an archive of Cramer's "Mad Money" recaps.

Recently, it seems as if everywhere Jim Cramer goes, people ask him the same question about the same stock: "What's the deal with Google (GOOG)?"

On Monday's "Mad Money" TV show, Cramer tackled the question head-on.

"Lately the stock has stalled," he said. It is time for market players to collectively acknowledge that while Google is "great," its 90% growth is decelerating. Google still has $600 written on it, but it is going lower, Cramer predicted. When the stock falls through $450, he said it will be time to do some business with it again.

Right now at $465, however, is not the right time to buy it, Cramer said. "We have to wait until the momentum buyers are washed out and finished selling."

Instead, he said, he has three Internet stocks with "better prospects" he would buy right here, right now to get through the "Google withdrawal." He presented them in descending order.

3. Yahoo!

Cramer's third favorite Internet pick is Yahoo! (YHOO), which he owns for his Action Alerts PLUS charitable trust.

Although nobody can say this company is better than Google, the reason Cramer likes Yahoo!, the stock, has nothing to do with Yahoo!, the company. Right now the stock is being bought hand-over-fist, and if "you mimic where the big money goes, it's often enough to score a big win," he said.

There are two reasons why Cramer believes people should buy Yahoo!. First, Fidelity Investments, a giant mutual fund that has been cutting its "massive stake" in Yahoo!, is almost done selling, said Cramer. Second, Legg Mason is buying shares of Yahoo!. When Fidelity's selling is done, the negative pressure on Yahoo! is likely to diminish, Cramer said. "This should take Yahoo!'s stock higher."

In addition to these two reasons, Yahoo! also has positive fundamentals, he said. It has a new search engine, Panama, which looks like it's "for real," and it has low guidance, which means a lowered downside risk, Cramer said.

"Its estimates are too low and could be beat here," he said.

2. IAC/Interactive Corp.

Cramer's second favorite Web stock is IAC/Interactive Corp. (IACI), CEO "Barry Diller's latest project."

Cramer said IAC is up nearly 60% from where he first recommended it on Aug. 8, back when "it was one of the most hated stocks." And even though the stock is up 15 straight points, it has "the juice that Google sadly lacks at the moment."

Plus, not only does it have "great brands," IAC is "nibbling up the whole Internet one bite at a time," Cramer said. In fact, it recently purchased CollegeHumor.com, a Web site he called a "quiet moneymaker."

While people used to think of IAC as a bunch of screwed-up businesses that weren't cohesive, the company's businesses do have a common "legitimate" theme -- "they are all things done better on the Web," Cramer said.

Lastly, IAC has a "real buyback," which shows just how much insiders believe in this company.

1. eBay

Cramer tagged eBay (EBAY) as his "primo, absolute favorite" Internet play.

He advised people to take some money off the table for Google and to put it into eBay, because he considers it the better stock right now.

Yahoo!, IAC and eBay are "pathetic parodies of companies when compared to Google," Cramer said. "But right now Google is leashed in, at least until it gets to $450."

Therefore, people can either stick with their guns and go down with Google or swap out of it and make some money with eBay, he said. There are seven reasons eBay is his favorite "while Google is out of commission."

First, it has become part of the culture. Second, although its acquisition of Skype might have been the "single dumbest purchase of the decade," Skype is at last getting "serious" after a period of underperforming. In addition, Cramer believes all the negative aspects of Skype have been priced into the stock.

The third reason he likes eBay is because it is starting to make "smart" purchases, such as its StubHub purchase, Cramer said. Fourth, it has an "improved search engine coming," and fifth, eBay's "international growth is en fuego."

The sixth reason to own eBay is that it owns PayPal, "the Visa, MasterCard and American Express of the Internet."

And finally, Cramer considers it the best Internet stock "because after all that's happened, it's pretty much a monopoly."

The momentum players getting out of Google are going to go into eBay because of its accelerated growth, he said. It's time for you to get in as well.

GSI Commerce: No Amazon

Cramer welcomed GSI Commerce (GSIC) CEO Michael Rubin to the show and asked him why people should stick with the e-commerce stock.

The reality is, Rubin responded, that the company is less than eight years old and its services are just "kicking in." The key factor that distinguishes a company such as GSI from and gives it the comparative advantage over a company such as Amazon (AMZN) is that "everything we do is about supporting our partners," the CEO went on to say. "We don't compete with them in any shape, way or form."

Cramer said that the company has "fabulous growth" and that he likes what he heard. He advised sticking with it.

To view Cramer's interview with Michael Rubin, please click here.

During the show's "Sudden Death" round, Cramer was bullish on China Mobile (CHL) and Time Warner (TWX).

He was bearish on Qiao Xing Universal Telephone (XING), Coca-Cola (KO) and Terra Industries (TRA).

Lightning Round

Cramer was bullish on GlobalSantaFe (GSF), Transocean (RIG), McDonald's (MCD), EMC (EMC), Moody's (MCO), McGraw Hill (MHP) and Greif (GEF).

Cramer was bearish on Alvarion (ALVR), Boston Scientific (BSX), Noble Energy (NBL) and NetScout Systems (NTCT).

For more of Cramer's insights during the Lightning Round, click here.

Want more Cramer? Check out Jim's rules and commandments for investing from his popular book by clicking here.