The issue is that eBay has lost some momentum, |
The key for Amazon is definitely top-line growth in 2002 and beyond. Expectations are not that big. Our model is for a 12 percent increase year over year. That by itself is not enough. Investors expect growth will accelerate in 2003 and beyond, and for that to happen, they need to have some new service deals. |
The results, on the surface at least, look pretty disappointing. We were all expecting some upside. |
The revenue guidance for the first quarter looks pretty solid. |
The second quarter got our hopes higher for margins, which came in significantly lower than we were expecting, |
The stock has been very high, commanding a high valuation, so it's understandable that the stock would go down. Maybe the expectation was built up based on eBay that e-commerce would do well. |
There was little new in Amazon's quarter or guidance as both followed Amazon's trend for the past several quarters, which is to meet guidance and lower margin expectations. |
There's been a string of bad luck and sloppy disclosure which does reduce the confidence of investors, especially those with shorter-term horizons. |
They are doing very well. The search market is growing very fast, and they'll probably continue to grow market share. |
They did the right thing and invested a lot of money back into R&D and their infrastructure, |
This is something that keeps increasing. |
To me, it was a very solid quarter. I'm not disappointed at all. We knew the point would come when operations would match expectations. |
We also expect more spending on search advertising. On top of these broader economic sectors, we expect the Internet companies, in particular e-commerce players, will increase their spending noticeably. These trends together will bring more maturity to the online advertising sector in China. |
We believe Amazon will lack any catalysts to move it higher and we consider the stock overvalued compared to peers. |
We believe there is a good chance for revenue upside, and we expect the stock to react positively to any top line upside. |