INTERNET INDUSTRY Presented By Melinda Ratzlaff Maggie Norman
INTERNET INDUSTRY Presented By: Melinda Ratzlaff Maggie Norman Aimee Halbach Scott Runyan Christine Hiller Winter Thielen
B U S TI N AE S XS T-Bill Rate UNEMPLOYMENT United States 1. 735% Deficit George $445, 000, 000 W. The internet is cyclical. Bush Largest boom was in 5. 2% Consumer Sentiment C EY 1990, but the bubble Individual Consumers Have There Is Recent Talk C has burst since then. GDP $11, 735 Billion SLBecome Customers About Key Implementing A Republican Whitehouse The PC Industry. E For. Consumption Tax.
THE CYCLICAL INTERNET
THE CYCLICAL INTERNET “An Industry Which Is Sensitive To Business Cycles And Whose Performance Is Tied To The Overall Economy”
THE TECHNOLOGY AGE TREND 20002002 TREND 36% IN 2004 Two Primary Factors: • Improving Company Fundamentals • More Favorable Macroeconomic Conditions
IT’S AN INTERNATIONAL THING United Kingdom 16, 948, 986 Users Japan 25, 091, 707 Users U. S. 119, 260, 663 Users Germany 20, 930, 295 Users Italy 16, 948, 628 Users
HOW’S BUSINESS? VALUE LINE RANKING 11/98
NEW KIDS IN TOWN World Wide Search Yahoo’s Yisou Engines Google’s Baidu
6 RULES OF CYBER-SPACE 1. Internet Tax Non-Discrimination Act 2. Identity Theft Penalty Enhancement Act 3. Cyber-Security Research And Development Act 4. Can-Spam Act of 2003 5. Electronic Signatures in Global And National Commerce Act 6. Internet Tax Freedom Act Of 1998
1 -800 -FLOWERS. com
1 -800 -FLOWERS. com Does More Than Just Peddle Petunias Online 1600 Stewart Avenue Westburry, NJ. 11590 516 -237 -6000 www. 1800 flowers. com
20 -CENTURY FLOWER SHOP We Sell Flowers And Specialty Gifts Ticker: In Stores, Telephone, Or Via The Internet Exchange: NASDAQ
THE HEAD FLORIST Jim Mc. Cann Chief Executive Officer Been Arranging Flowers Since 1986 To Build A Reliable Brand Name That People Would Learn To Love
MONEY $975, 000 $256, 731 Mc. Cann Soenen CEO Of FTD
FLOWER DISTRICT FTD Roll International Bear Creek Corporation
FROM THE EXPERT Price Projection High $14. 00 Price Projection Low $9. 00 Financial Strength B
RELATIONSHIPS
THIS IS A SEASONAL BUSINESS TO BE IN Profits Are Higher In The 2/4 Quarters And Tend To Drop In The 1/3 Quarters
REUTERS Analysts Recommend The Stock Will Outperform, But There Are Still A Number Of Them That Also Recommend To Hold
MSN MONEY Analysts Recommend 1 -800 FLOWERS. com As A Moderate Buy. They Also Have Quite A Few Analysts Who Recommend Hold.
TO BUY OR TO SELL Buy $7. 00 - $7. 30 Sell $8. 00 - $8. 50 BUY INTRINSIC VALUE BUY Current Price $7. 03 High Intrinsic Value $12. 50 Low Intrinsic Value $8. 04 For The Low Risk Investor
AMAZON “Earth’s Most Customer Centric Company” 1200 12 th Avenue Seattle, WA 98144 1 -206 -266 -1000 www. amazon. com
AMAZON, AS IN JUNGLE? • Offers New, Used, Refurbished And Collectable Items • Syndicated Stores Program • Amazon Marketplace And Merchants Program Ticker: AMZN Exchange: NASDAQ
GUESS WHO Graduated Summa Cum #3 On Fortune Person Of The Year, Laude From“ 40 Princeton Magazine’s Under Time Magazine, 1999 University 40” Richest People 2003
GUESS WHO Name: Jeffrey P. Bezos Position: CEO Appointed: 1994 “…. to build a place where people can come to find and discover anything they might want to buy online. ”
THE COMPENSATION WINNER IS… AOL Richard e. Bay Parson Yahoo Margaret Whitman $13, 245, 165 $2, 908, 231 Terry Semel $601, 980 Runner Up! Mr. Bezos with $81, 840
IT’S A JUNGLE OUT THERE!
THE MACD Possible Return: 51%-53%
GIVE ME A “V” Beta: 2. 49 Safety: 4 Technical: 5 Timeliness: 2 Financial Strength: B
NO BOUNDARIES WA CA TN VA NV KY KS PA ND Great Germany Canada Japan Britain France DE
RETURNING THE FAVOR Outperformed the S&P 500 Technology Index since August of 2002
ALL ABOUT THE PROFITS A Dollar Made Is A Dollar Earned
REUTERS Strong Signal To Sell High Mean Rating
BLOOMBERG Strong Signal To Sell!
MAGGIE’S RECOMMENDATION Current Price $33. 29 BUY High Intrinsic Value UNDERVALUED For Long-Term $63. 06 Low Intrinsic Value $40. 54 BUY: $35 -$36 SELL: $53 -$55
Verisign Intelligent Infrastructure Services 487 East Middle Road Mountain View, CA. 94043 650 -961 -7500 www. Verisign. com
COME AGAIN? Provider Of Critical Internet Communications Services Infrastructure Service Group Services Ticker: VRSN Exchange: NASDAQ
THE MAN BEHIND THE BUSINESS Stratton Sclavos “We want everyone to reap the benefits of the ongoing CEO & Directorrevolution in digital commerce and communications. ” July 1995 Forbes Honored Magazine For Morgan Leadership Stanley Success By… Computer World
THE OFFICERS Sclavos Conner $862, 058 $1, 262, 308 Thompson Coviello $2, 714, 447 $684, 000
BATTLING IT OUT SYMANTEC ENTRUST RSA
MACD SELL BUY Possible Return of 17. 86% -- 46. 11%
WHAT’S IT WORTH Timeliness Safety Technical 2/5 4/5 2/5
HOW CAN I SERVE YOU • Billing Helps With And Internet Payment Related Problems Services • Expansion Email Security Into New Solutions Countries
STAGE FRIGHT Has Not Outperformed The S&P In 4 Years
A NET PROBLEM Verisign Needs To Continue To Outperform the S&P In Net Profit Margin To Bring Up Their 5 Year Average.
REUTERS Hold Is Winning By Only 4 Votes Very Diversified In Their Recommendations
BLOOMBERG Again, Analyst’s Recommendations Are Pretty Spread Out.
IN RESULT… Current SELLPrice $25. 33 UNDERVALUED High Intrinsic Value $48. 57 Buy $15 -$17 Sell $32 -$34 Low Intrinsic Value $29. 14 This Stock Is Only For Risky Investors
YAHOO Internet Communication Global Leader 701 First Avenue Sunnyvale, CA 94089 Phone: (404) 349 -3300 www. yahoo. com
SEARCHING AN ENGINE • Provides Users With Everything From A-Z • 74% Of Revenues Comes From Online Advertising Ticker: YHOO Exchange: NASDAQ
GLOBAL LEADER A Stagnating $8. 11 Stock The More. Restored We Invest Price to $32. 00 In Our Users The More They Will Invest Restored Profitability For The In Us. First Time In 7 Consecutive Quarters Position: Chairman & Name: Terry Semel Appointed: May 2001 CEO
THE GOLDEN RULE AOL – Parsons $13, 245, 165 e. Bay – Whitman $2, 908, 231 Yahoo – Semel $601, 980 Google – Schmidt $554, 450
THE BATTLE FOR MARKET SHARE
MACD Buy at $30 -$33 Sell at $36 -$38 Possible Return of 15%-20%
LINE ‘EM UP! Financial Strength B+ Timeliness 1 Technical 4 Safety 3
THE ANALYSIS vulnerability Weakness STRENGTH Brand Recognition
THE ANALYSIS Threats Opportun. Ity Recent Acquisitions Increased Competition
How am I doing? Underperformed the s&p
RISING UP TO THE CHALLENGE Out performing the S&P In All Categories!
reuters • Low Risk Rating • Mean Rating of 2 on a 1 -5 scale
bloomberg B U y Analysts Are Expecting a Higher Q 1 Earnings Growth Report
What to do Moderate to shortterm investor with holding period of 1 -3 years BUY SELL: $36 -$40 BUY: $28 -$34 High Low Intrinsic Value $19. 72 $31. 55 Current Price $34. 94 OVERVALUED
Vignette Corporation The Efficiency Experts 1301 SOUTH MOPAC EXPRESSWAY AUSTIN, TX 78746 1 -512 -743 -4300 WWW. VIGNETTE. COM
WHAT IS IT THAT YOU DO? • Founded in 1995 in Austin, TX • Produces Content Management Software • Went Public in 1999 Ticker: VIGN Exchange: Nasdaq
THE MAN BEHIND THE BUSINESS • Thomas E. Hogan • President & CEO • Appointed in 2002
THE MAN BEHIND THE BUSINESS • Thomas E. Hogan “Our goal is to build on • President & CEO our progress and • Appointed in momentum in 2003. ” 2002
HOW DOES HOGAN ADD UP? $10 M $6 M Roberts (File. Net) Options Palmisano (IBM) Total Compensation Tucci (EMC) Hogan (Vignette) $2 M
PUT ‘EM UP! Management Software Organization Software Information Technology
MACD Possible Return of 34%-41% BUY SELL
Financial Strength B+ Earnings Predictability 25 THE VALUE IN VIGNETTE Price Growth Persistence 5 Stock’s Price Stability 5
GROWING PAINS 60 50 40 30 20 Vignette 10 Technology S&P 500 Sales vs. Qtr. 1 yr. Ago Sales vs. TTM 1 yr. Ago Sales – 5 yr. Growth
COMPARING APPLES TO APPLES Has Not Outperformed The Industry Or The S&P 500 For The Last Five Years.
IT’S ALL ABOUT THE BENJAMINS Vignette S&P 500 Technology N. P. M. - 5 years Net Profit Margin O. M. - 5 years Operating Margin G. M. - 5 years Gross Margin -50 0 50 100
BLOOMBERG Bloomberg Says To Hold The 40 -60% Can Change In The Near Future
REUTERS The high mean rating means that the company could be in serious trouble. HOLD Says To
MY RECOMMENDATION Current Price S $1. 29 Valu. Engine E L L Risk Adverse BUY: $1. 00 -$1. 29 SELL: $1. 52 -$1. 58 Good Concepts Intrinsic: High $1. 36 Low $1. 15
e. Bay “I Got It On e. Bay!”
e. Bay “I Got It On e. Bay!” 2145 Hamilton Avenue San Jose, CA. 95125 1 -408 -376 -7400 www. e. Bay. com
WHAT A CONCEPT! * Lead Trading Forum On the Internet * Over 27, 000 Categories to Choose From Ticker: EBAY * Uses Paypal for Safe and Easy Transactions Exchange: NASDAQ
The power of a woman e. Bay desires to create an efficient, honest market where everyone has to play by the same rules President, Margaret Appointed CEO, (Meg) in & 1998 Whitman Director Margaret (meg) Whitman
Show me the money AOL: $13, 245, 165 e. Bay: $2, 908, 231 Yahoo: $601, 980 Google: $554, 450 Amazon: $81, 840 Entry-Level Marketer: $30, 000
The head honchos! yahoo AOL google e. Bay’s Main Competitor!
macd Possible Return: 61%-62%
What’s in a name? Financial Strength A+ Technical Beta 2. 06323 Timeliness Safety
Tickets to the gun show • Brand Market Leadership • Double-Digit Growth • Innovative Developments
Is that a threat? • Results of litigation proceedings • competition • Exchange rates
Head of the class Has Outperformed the S&P Since October 2002
optimism • 30% of revenues come from • Makes online transactions easy foreign countries Analysts are optimistic about e. Bay’s core • Customers feel confident about • Major player businesses and emerging putting their information onlinegrowth vehicles • Untapped diversified markets paypal Marketing abroad
reuters Leaning towards a buy for ebay’s stock
bloomberg Buy!
What would scott do? Current price Low intrinsic $31. 97 $49. 55 High intrinsic $76. 58 undervalued
So… Buy! Buying at $31. 97 + Selling at $60. 00 = gain of 87. 7% Buy: $36 -$37 Sell: $58 -$60
THANK YOU FOR The Internet Group YOUR TIME
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