S&P Capital IQ Equity Research Issues 2013 Internet Predictions
by PR Newswire
NEW YORK, Jan. 7, 2013 /PRNewswire/ -- Facebook's disappointing IPO, Apple's new products and software shortcomings, Yahoo's three new CEOs including Marissa Mayer, Google's purchase of Motorola Mobility, and resurgent search competition in China, are among the many developments that kept the Internet segment very interesting in 2012. Given the nature of the area, it will probably stay in the news in 2013, and accordingly, Scott Kessler, Internet equity analyst and head of the Technology Sector team at S&P Capital IQ Equity Research, has issued 13 Internet predictions for 2013.
On January 4, 2013, Mr. Kessler issued the following predictions.
- We believe Internet companies will increasingly utilize their balance sheets for stock buybacks and dividends.
- Reflecting what we see as a decline in interest and confidence in iOS apps, following disappointment related to Maps and Siri, we see Apple making substantial commitments to improving its mobile software offerings.
- As Facebook looks to emphasize mobile and monetization more, and users become increasingly concerned about privacy issues, we see greater potential for "Facebook fatigue."
- We think Facebook will expand its Gifts offering and make e-commerce and perhaps payments more of a priority.
- With the FTC's inquiry into Google having ended, we believe the company will become more proactive with acquisitions in terms of size and volume.
- We believe Google will continue to invest in its enterprise business, with new offerings and features.
- We think Yahoo CEO Marissa Mayer has made many good decisions but we believe it will take time for the financials to follow suit. We think a lot of the positives are already priced into the stock.
- We don't expect Alibaba Group to come public or even announce a planned offering in 2013, to the chagrin of Yahoo investors.
- We see divestitures of non-core businesses, investments, and products as an important theme, as Internet companies look to focus their resources and simplify their operating structures.
- Repeating a prediction from last year, we believe cyber security will become an even more important issue in 2013.
- We think 2013 will be more challenging for online travel companies and stocks, reflecting more mature businesses and substantial competition.
- We think CEOs at ValueClick and WebMD appointed in 2012 will help deliver value for shareholders in 2013.
- We believe that announced planned data center and network investments will enable EarthLink to become more of a nationally known and successful technology service provider.
"I've been making these predictions for a number of years and, of course, I get some right and some wrong," Mr. Kessler said. "We made a number of accurate predictions last year, and I encourage folks to read our related research and reach out to discuss. We'll see in a year or so how this year's predictions do."
Facebook (FB 29, Hold)
Apple (AAPL 527, Strong Buy)
Yahoo (YHOO 20, Hold)
Google (GOOG 738, Hold)
ValueClick (VCLK 20, Strong Buy)
WebMD (WBMD 16, Buy)
EarthLink (ELNK 7, Strong Buy)
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