How bad a dent could the mortgage mess eventually make in the earnings of internet companies? As we reported last week, this has been very much on the internet companies’ radar screens, though the impact seems not yet to have filtered through.
Early estimates point to some wide variations. According to Henry Blodget, some 13 per cent of the revenues of the four biggest US internet companies is at stake.
In contrast, Sandeep Aggarwal at Oppenheimer today comes up with a far less alarming analysis. He reckons the mess will only trim revenues at Google and Yahoo! by 0.6 per cent this year and around 1 per cent in 2008.
Why such a big disparity? It all depends on your guess as to how big a chunk of online advertising the mortgage business represents. Also, Blodget reckons the impact will spread beyond mortgages, as related businesses that are tied to the housing market cut back.
Either way, the mortgage saga will be one of the first tests of how resistant the new search-driven online ad market is to external cyclical shocks.
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