Stock Market & Search Stocks: Goog, Yhoo, Askj, Iaci

Hedge Funds:
Hedge fund investors have too much money chassing too few good deals:

With surging investor demand for hedge funds, buyout funds and venture capital firms, some funds are slamming the door to new investors, industry experts said at a New York conference on Wednesday. Some complain the industry has gotten too crowded to generate the double-digit returns they seek.

Summer is Slow for Search:
Earnings season is coming. Search is normally a bit slower in the Summer since people spend more time outside enjoying fun weather.

Google is nearing $300 again, and Google option prices are predicting a move:

"Options are already pricing in a plus or minus 14 percent move for Google's earnings, making outright option buying expensive," Goldman Sachs strategists Maria Grant and John Marshall wrote in their latest Weekly Options Watch commentary.

Goldman Sachs Internet analyst Anthony Noto believes investors should own Google and expects Google to post strong results on July 21. Noto said he prefers to wait until after the quarter to reassess attractive entry points, given the recent rally in the stock.

Yahoo! has gained nearly $3 a share in the last 5 days. Legg Mason (not exactly sure why but they one of my favorite analyst firms) initiated coverage on Yhoo at buy. Yahoo! recently started adding crawled web listings to their Hot Jobs job search.

InterActive Corp is supposed to spin off Expedia and close their Ask Jeeves purchase this month. Although I think they are under contract with Google until 2007 there are rumours that Ask Jeeves will be launching their own internal pay per click network. I can't see them doing it anytime soon though.

Andy Beal, author of SearchEngineLowdown, recently announced on his blog that he is quiting working for Websourced, which is the largest public SEO company (trading on AMEX as THK). He was a senior VP of marketing and prettymuch the face of as far as I know, so that is a huge blow to them.

Their stock price has been hovering in the $2 to $3 range recently. About a month ago they gained about $25 million in market capitalization which coincided with getting a $15 million loan. Since then the stock has dropped back to $2.05 a share, and currently their market capitalization sits at about 68 million dollars.

I believe WebSourced acquires many of their clients through leads from inqueries at search conferences, such as JupiterMedia's Search Engine Strategies conference (which is highly recommend and being held in San Jose from August 8TH to 11TH). KeywordRanking is sponsoring the San Jose event, but it will be interesting to see what happens with Andy. He is a popular speaker on the conference scene.

Recently WebSourced brought on Heather Lloyd-Martin and Mike Grehan (who is arguably one of the top trusted names in search), but in the last month they have lost Andy Beal and Jason Dowdell. Andy posted his reasons for leaving:

I wanted my readers to be the first to know that I have decided to resign my position at WebSourced, Inc. The five years that I have spent, helping the company grow from a start-up to the world’s largest search marketing company, have been some of the most rewarding, exciting and satisfying of my career.

In writing this letter, I hope to avoid any confusion as to why I decided to resign as VP of Marketing. This decision is not one that comes lightly. It is clear that my vision for the company’s future does not match-up with its current course. These philosophical differences have led me to conclude that WebSourced’s current path does not align with my own beliefs.

But you have to wonder the exact reason and how soon others may follow.

To run a successful search firm you only need one or two names and a small group of talented programmers and people who truely understand how the web works.

From my knowledge of the industry and how quickly stuff changes I can't fathom creating a business model that provided effective results and scaling it out to hundreds of employees and thousands of clients.

WebSourced's current business model has a ton of employees, and a small change in client acquisition could likely cost many jobs. It will be interesting to see how the stock market reacts to this news.

Internet Archive Sued:
the Internet Archive caches a history of the web. Recently the New York Times reported the Internet Archive is getting sued. If they are forced to pay any sort of fine that could have huge implications for the search business in general.

Published: July 14, 2005 by Aaron Wall in stock market


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