Nobody has dared to mention the word yet. So, I’ll be the first. This is a bubble, plain and simple.
Just look at the companies involved: You’ve got Cisco (CSCO:NASDAQ), Amazon (AMZN:NASDAQ), Microsoft (MSFT:NASDAQ), and the parent company of AOL, Time Warner (TWX:NYSE). It is the same old names.
Just like they were during the last tech bubble, these companies are on a buying spree. We may not be seeing the kind of outrageous buying we were used to seeing during the late ‘90s, but you can bet, this is just the beginning.
Major technology players are fighting tooth-and-nail to get a stake in the quickly growing Internet video craze. This is a subject I have discussed at length in this column. But even I didn’t think it would move this quickly. I am not complaining.
The BreakAway Investor portfolio is loaded with companies benefiting from the switch to “new” media. The majority of our plays are already proving to be hefty, double-digit winners.
The latest gains came earlier this week with a fresh round of merger activity. On Tuesday, Cisco announced it would be spending nearly $100 million to purchase Arroyo Video Solutions, a software company with products designed to enhance Internet video transmission and storage.
Sony Pictures Entertainment (SNE:NYSE) announced yesterday that it had bought Grouper, an online video site, for $65 million. Some industry analysts are calling the move “defensive.” They claim the company bought Grouper simply because its competitors were buying similar sites.
On a similar note, privately owned YouTube, a video-sharing Web site, will begin offering video advertisements. Until recently, technology critics questioned the site’s revenue model. This week’s news puts an end to the speculation.
Company’s like News Corp (NWS:NYSE), which owns Fox, and Warner Music Group (WMG:NYSE) and its Warner Brothers Records affiliate will be among the first to advertise their products on the site. You can bet they will be spending big money, although no figures have been officially released.
-----------------advertisement-----------------
"Forget Halliburton and Schlumberger," says Forbes.com,
"There's black gold in the ocean." The good news about deep-sea oil drilling is out! Morgan Stanley has declared "substantial growth potential" for the industry and now's your chance to cash in on this red-hot energy source and own one of the most exciting and profitable companies drilling today -- 324% could be yours in the next 12 months.
For the full report on the best energy investment you can make today, click here.
http://www.isecureonline.com/reports/CUT/WCUTG616/
---------------------------------------------------
There will be no shortage of ad watchers. YouTube boasts that its videos, which cost it nothing to obtain, are watched over 100 million times each day. Without exposure on YouTube, advertisers can only dream of getting that kind of consumer attention.
Wall Street speculators have tried desperately to put a price tag on YouTube. Right now, the estimates are well into the billion-dollar range. Without a doubt, somebody will be spending huge amounts of money in the very near future to get their hands on the company and its Web site.
The mainstream media has yet to call this trend a bubble, but they soon will. Right now, modest amounts of money are being thrown around. Soon, as the industry consolidates, huge amounts will be spent in an effort to ensure industry dominance.
If you want to play this industry, do it now. Valuations are cheap. If history has taught us anything, they won’t stay that way for long.
On a totally different note, I wanted to take a few paragraphs to thank all the Fear and Greed readers who took some time out of their day to respond to my recent comments on Ford (F:NYSE) and its troubled future.
I heard a wide range of comments from all sorts of folks. Some were former Ford employees, others were disgruntled Ford owners, and others were management experts. With no exception, every comment was interesting and thought-provoking. I appreciate the response.
The rumors surrounding the company never stop. Today, rumors that the Ford family may take the failing company private are making their rounds once again.
If this happens, it would be the end of a great American company. The family claims it could accelerate the automaker’s turnaround plans if it does it outside the “public” eye.
I am afraid, though, without shareholders breathing down management’s back, this incompetent group would drive the company further into the ground. After all, the CEO’s qualifications are nothing more than his last name.
Please keep the comments coming, but don’t limit them to just the auto industry. I am anxious to hear your thoughts and opinions on the Internet-video craze as well.
I want to make sure I am researching and writing about companies and trends you want to hear about. With extensive media experience, I am extremely close to this subject. I need to know if you care about the shift to “new” media as much as I do.
Feel free to send your comments to fng@taipangroup.com.
Enjoy your day.
Andrew Snyder
Executive Editor, Fear and Greed
Comments