Internet Shares Rise on Ad Market Hopes
Some Internet juggernauts made waves on Wall Street Thursday. With no specific news provoking the buying, experts guessed that investors are looking ahead to the recovery of the advertising market.
"I don't know specifically why Yahoo!
Shares of Yahoo! $18.95, up 11%, though far below their 52-week high of $43.38. Web advertiser DoubleClick (DCLK) closed up 11% to $11.13. And online retailer Amazon.com (AMZN) gained 2.9% to $12.10. Meanwhile, Internet software provider Inktomi (INKT) gained 13.6% to $6.61, and rival Akamai Technologies (AKAM) rose 2.3% to $6.21.
The erstwhile high-fliers are all sharply off their highs but have at least demonstrated some survivor's instinct in the face of disappearing revenues. Could their recent strength signal a turnaround for the ad market?Yes, said Kathleen Heaney, analyst at Brean Murray & Co., who covers Yahoo!. "These companies are leading indicators" for the ad market, Heaney said. "If people think the worst is behind them, then you'd want to come in when earnings are at their bad point." Heaney said she did not see any news that could have driven Thursday's buying of stocks like Yahoo! and DoubleClick, but noted that it could be the trickle-down effect from the two media conferences taking place in New York this week. The companies aren't participating in the conferences. "Advertisers are presenting and I think the picture coming out wasn't that gloomy, and that it's almost like the worst is behind us," Heaney said. "So if you start looking around and say, 'OK, advertising has probably bottomed and can get better; who can benefit but a Yahoo, or something like that?'" With over 200 million customers, Yahoo! will be one of the firstbeneficiaries of any recovery of the ad market, said Heaney, who has a long-term strong buy on the company. Her firm hasn't done any underwriting for Yahoo!. "I believe in its advertising model and I accept that advertising will always be the biggest chunk of their revenue," Heaney said. "But they will have other revenue streams coming in."
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV