John J. Edwards III chatted on AOL MarketTalk on Monday, June 19. AOL's MarketTalk is hosted by Sage Online (Keyword: PF Live).
Live from New York, NY, please welcome John Edwards, assistant managing editor,
. John can answer questions about the latest market-moving news.
offer individual stock commentaries or recommendations.
Good afternoon and welcome to MarketTalk, Mr. Edwards!
Thanks for having me. As always, great to be here!
Will this high interest-rate environment hurt corporate earnings?
It's likely to dampen earnings somewhat, which suggests that we won't be seeing the kind of rampant expansion of
price-to-earnings ratios that we saw toward the end of last year.
I think investors are getting more concerned about a consistent stream of earnings (or at least a clear trajectory toward one). We're seeing that in the overvalued Net stocks, of course, but I think we're seeing it elsewhere and will continue to as the economy eases.
What is your opinion of it?
I think it's facing a lot of challenges and has made some bold bets that need to pay off big time. The company is in many ways a test case for a certain kind of media/telecom convergence, and while it's clear we'll see more of that, it's by no means clear who the ultimate winners will be.
Do you think the Internet is more a conduit for business transactions, as opposed to an entertainment platform?
I think it's pretty far from the time when it'll be a truly successful mass-entertainment medium. Sure, we'll see more TV-like applications (such as the just-released
), but I think there will always be demand for the more passive entertainment that current TV provides.
I think the Net is primarily a communications medium, which can mean communicating news, communicating among friends, communicating in a business-transactions context and more, but straight entertainment is pretty far down the list in anything but a niche kind of way.
What is your opinion of the future for
Well, I'm not really qualified to comment very specifically, but I think it'll be interesting to see if Motorola can get past the way it's hamstrung by being a U.S.-based company in one of the few industries (e.g. cellular communications), whose leaders are in Europe and Asia.
I'd watch the interplay of Motorola,
closely. We have a great wireless-technology reporter at
, and you should watch for her stories for some real insights.
Do you think traditional paging networks will disappear as more phone companies offer paging services with their cellular-phone service?
Paging is definitely one of those areas that's been rendered a mere niche when it once seemed like it might be an important pillar of telecom. I think full-featured paging-like applications of all kinds (such as
) will continue to render ordinary paging obsolete.
With all the acquisitions of other paper companies, how long do you think before the
International Paper Co.
stock will start going up?
Well, I can't give a specific prediction, but I have to say I'd be wary of counting on a big bounce for IP or the rest of the group. These commodity-based businesses depend a lot on economic expansion, and a slowing economic environment is not good for them.
Can you explain the difference between viral and organic growth in regards to Web business?
Viral growth is growth that essentially feeds on itself. The term is often used in the context of marketing, with viral marketing meaning your message is amplified by the people who receive it.
A fancy way of saying word-of-mouth, essentially. Organic growth is much more linear, more based on a simple response of individual consumers to your marketing message than on their extending your message for you.
Thank you very much for joining us today, Mr. Edwards. It's always a pleasure!
Thanks for having me! As always, great chatting with you. I'll see you at the new, all-free