Yes, the economy sucks. But this too shall pass, and when it does, the Internet is where you want to be.
In a nutshell, that’s what Barclays’ Doug Anmuth reminds us today, with his “2009 Internet Trends / Things To Watch For” report.
First, the obligatory up-and-to-the-right long view:
Internet activity continues to increase as the medium plays a more significant role in people’s lives, and this increased usage and dependence should leave Internet companies well-positioned when the macro environment improves.
Then Doug gets specific:
- Both Yahoo (YHOO) and eBay (EBAY) are “at a crossroads” and need to make major strategic decisions over the next year. [How about over the next month? And when will eBay finally sell Skype? Can’t be soon enough]
- Microsoft’s (MSFT) search will grow. The company, with an anemic share of the search market, needs pre-install toolbar deals so badly with Dell (DELL) and HP (HPQ) it will likely outbid Google (GOOG) in negotiations with PC makers, boosting share a few per cent. [Agreed that Microsoft will buy share. And the implication is this: Distribution and incremental growth will get more expensive for Google, too. This will put pressure on margins. Ultimately, however, Microsoft won’t inflict real damage unless it is willing to do bad economic deals forever.]
- The crummy economy will put pressure on e-commerce margins, but as companies like Circuit City (CC) go bankrupt, e-tailers like Amazon (AMZN) will pick up the slack. [Pleasant thoughts, but stocks rarely go up when margins are declining, no matter what’s happening with share.]
- Large Internet companies will continue to acquire smaller companies — but they’ll do it cheaper than before. [Yes. But their own currencies will also be deflated. Cash flow will certainly be a major advantage here.]
- More cost-cutting, more ad network consolidation, and a smaller advertiser base. [Translation: Dozens of ad networks will either go out of business or sell at firesale prices. Display advertising across the industry will drop at least 10%.]
What gets Doug most excited about 2009? “The Obama Effect.”:
Obama’s broadband build-out and general comfort with technology will “positively impact overall Internet usage, thereby benefitting e-commerce and Internet companies overall.”