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Monday, April 11, 2005

Internet news/analysis in brief

  • Click fraud breaks out. Click fraud finally hit mainstream investors' radar screens due to a Wall Street Journal article (subscription required) that raised questions about Google's (ticker: GOOG), Yahoo's (ticker: YHOO) and Ask Jeeves' (ticker: ASKJ) revenues. Contextual advertising firm Quigo CEO Michael Yavonditte estimates that between 5% and 13% of all clicks are fraudulent. Anti-click-fraud services firm ClickAssurance LLC's Jorge Zuniga says the number is 10% to 20%, "but estimates that as many as 80% of clicks are fraudulent for some key words on certain search engines". Quick comment: Click fraud is not a problem for sophisticated advertisers because their bids for ads are a function of their return on investment (RoI) and thus conversion to sale rates, which are immune from click fraud. It's key impact is in depressing average prices per click and thus lowering the realizable value of genuine traffic. As web analytics improve, click fraud will be more easily detectable and advertisers will be able to manage more closely to RoI. Note: Internet Stock Blog analysis of the click fraud issue here and here.
  • Initiations of coverage. RBC initiated coverage on Provide Commerce (ticker: PRVD) with an Outperform, on Blue Nile (ticker: NILE) with a Sector Perform, on Amazon (ticker: AMZN) with a Sector Perform, and on Overstock.com (ticker: OSTK) with an Underperform. CIBC World Markets initiated coverage on Odimo (ticker: ODMO) with a Sector Outperform.
  • DoubleClick partners with AOL. America Online (owned by Time Warner, ticker: TWX) announced that DoubleClick (ticker: DCLK), will provide AOL Media Networks with ad serving, inventory management, workflow tools and delivery operations. AOL Media Networks is the ad sales, commerce and search arm of America Online, and also handles the marketing of the AOL web brands. DoubleClick's ad management platform, DART for Publishers, is being piloted on Mapquest now and will begin to be implemented across all AOL brands later this year. Quick comment: Don't get too excited for DoubleClick: ad serving is a highly competitive business with shriking margins.
  • This week's Internet earnings announcements. Tuesday: Travelzoo (ticker: TZOO).
  • Icahn good for Netflix? David Strahlberg of the Media Stock Blog discusses whether Carl Icahn's assault on Blockbuster's management is good for Netflix (ticker: NFLX).
  • Greenfield acquisition. Online survey company Greenfield Online (ticker: SRVY) announced the acquisition of CIAO, the largest independent survey research provider in Europe, for $154 million. EUR57.7 million was paid in cash and the rest with 3.9 million shares of Greenfield Online common stock.
  • New domain names. ICAN gave final approval to  ".jobs" for the human resources community and ".travel" for the travel industry. Preliminary approval has been given for ".post" for postal services and ".mobi" for mobile services, and negotiations continue. Probably incremenally positive for all the domain name registrars, including Register.com (ticker: RCOM), Tucows (ticker: TCOW) and Verisign (ticker: VRSN). No decision yet act on a contract to run the ".net" directories beyond June 30, though an outside company has recommended that VeriSign be given a six-year extension on its contract.

Posted by David Jackson on April 11, 2005 at 12:01 AM in Sub-sector: Search, ticker: AMZN, ticker: ASKJ, ticker: DCLK, ticker: GOOG, ticker: NILE, ticker: ODMO, ticker: OSTK, ticker: PRVD, ticker: RCOM, ticker: SRVY, ticker: TCOW, ticker: TWX, ticker: TZOO, ticker: VRSN, ticker: YHOO | Permalink


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