Internet Stocks
Jugroop Kullar
Nicole Taylor
Presentation Outline
Examples of Internet Stocks
Types of Internet Stocks
How Stocks are Evaluated

P/E Ratio
Tech Wreck
IPOs
Examples

Juniper Networks, Amazon.com, Yahoo!
Lessons Learned
What are General
Examples of Internet
Stocks?
AMZN
EBAY
AOL
YHOO
JNPR
CSCO
ORCL
Types of Internet Stocks
E-commerce – consumer
E-commerce – business
Content
Connectivity
Software
Services
Source: “212 and Counting.” 18 August 1999. 11 November 2001 <http://fundpilot.net/stockbrief.htm>
Types of Internet Stocks
E-commerce – consumer

Companies that sell goods/services to
consumers over the Internet
Examples:
Amazon.com
 Ebay.com
 Autobytel.com
 E-trade.com

Source: “212 and Counting.” 18 August 1999. 11 November 2001 <http://fundpilot.net/stockbrief.htm>
Types of Internet Stocks
E-commerce – business

Companies that sell goods/services to
businesses over the Internet
Examples:
Stamps.com
 Hotjobs.com
 Allscripts Inc.
 Claimsnet.com

Source: “212 and Counting.” 18 August 1999. 11 November 2001 <http://fundpilot.net/stockbrief.htm>
Types of Internet Stocks
Content

Companies that provide information or
community services via the Internet to
consumers and/or businesses
Examples:
Yahoo!
 Lycos
 Homestore.com
 Ask Jeeves Inc.

Source: “212 and Counting.” 18 August 1999. 11 November 2001 <http://fundpilot.net/stockbrief.htm>
Types of Internet Stocks
Connectivity

Internet service providers (ISPs), Application
service providers (ASPs), hosting/co-location,
backbone providers
Examples:
AOL
 Juno Online
 Digex Inc.
 Earthlink

Source: “212 and Counting.” 18 August 1999. 11 November 2001 <http://fundpilot.net/stockbrief.htm>
Types of Internet Stocks
Software

Companies that design and sell software for
use on the Internet, Intranets, or Extranets
Examples:
Ariba
 Verisign
 Macromedia Inc
 Broadvision

Source: “212 and Counting.” 18 August 1999. 11 November 2001 <http://fundpilot.net/stockbrief.htm>
Types of Internet Stocks
Services

Companies that provide services to businesses
operating on the Internet, including consulting,
advertising, and marketing
Examples:
Network Solutions
 Modem Media
 Cobalt Group
 Doubleclick

Source: “212 and Counting.” 18 August 1999. 11 November 2001 <http://fundpilot.net/stockbrief.htm>
How are Stocks
Evaluated?
By Research
By Stock Market Indices
Stock Market
Index
# of
Stocks
Types of Stocks
Dow Jones Industrial
Average
30
Large, growing companies. Chosen
by editors of the Wall Street Journal
S & P 500
500
Largest, most widely held
ISDEX
50
50 Internet Stocks
Nasdaq Composite
5000+
All stocks traded on the Nasdaq
Exchange
Russel 2000
2000
Smallest 2,000 of the largest 3,000 by
market cap
Sources: www.biz.yahoo.com and Group 5 presentation on Internet Stocks from Winter 2001 Semester
How are Stocks
Evaluated?
Company’s Financial
Standings/Performance
P/E Ratio
P/E Ratio
P/E =
price of stock  stock
earnings
(how much you’re willing to pay for a
company’s earnings)
Source: Interview with Ben Worley, Investment Rep. From Edward Jones, Sept. 7, 2001.
What does it mean?
“The Idea behind P/E Ratio is that it is a
prediction or more likely an expectation of the
company’s performance in the future. A
company with a P/E higher than the market or
industry average means the market is
expecting big things over the next few months
or years. A company with a high P/E ratio will
eventually have to live up to this high rating
by either substantially increasing its
earnings, or the stock price will need to drop.”
Source: www.investopedia.com “ Understanding the P/E Ratio”.
The Risk Factor and P/E
Beware! Even in stocks,
there are speed limits.
Pfizer drives at 30 – 40 MPH
Juniper Networks was speeding
at 400 MPH at the highest peak
Source: Interview with Ben Worley, Investment Rep. From Edward Jones, Sept. 7, 2001.
Tech Wreck
“When Good Stocks Go Bad”
These companies did not live up to the
high expectations, so inevitably, the
stock price had to fall…crash.
How Did it Happen?
“Sticker Shock”
People overpaid for these stocks and
couldn’t get rid of them once they
started losing value
Source: Interview with Ben Worley, Investment Rep. From Edward Jones, Sept. 7, 2001.
What is an IPO?
Initial public offering (IPO) — The first time
a company sells stock to the public. An IPO is
a type of a primary offering, which occurs
whenever a company sells new stock, and
differs from a secondary offering, which is the
public sale of previously issued securities,
usually held by insiders. Some people say
IPO stands for "Immediate Profit
Opportunities." More cynical observers say it
stands for "It's Probably Overpriced."
http://moneycentral.hoovers.com/msn/basics/0,2980,6,00.html
IPOs Over Time
IPOs by the quarter from 1998 to present
160
# of IPOs
140
120
100
80
60
40
1Q
19
2Q 98
19
3Q 98
19
9
4Q 8
19
1Q 98
19
2Q 99
19
3Q 99
19
9
4Q 9
19
1Q 99
20
2Q 00
20
3Q 00
20
4Q 00
20
1Q 00
20
2Q 01
20
3Q 01
20
4Q 01
20
01
20
0
Time Period
Source: http:.//moneycentral.hoovers.com/msn/ipo_performance/recent_ipos/0,2980,3_101,00.html
IPOs Over Time
IPO's by year from 1998 to 2001
500
# of IPO's
400
300
200
100
0
1998
1999
2000
2001
Year
Source: http:.//moneycentral.hoovers.com/msn/ipo_performance/recent_ipos/0,2980,3_101,00.html
Dot Com Graveyard
August 2000
10
September 2000
22
October 2000
35
November 2000
46
December 2000
40
January 2001
44
Source: Battery, Jim. “Dot-Com Details: The Numbers Behind the Year’s E-Commerce Shake-out.”
InfoWorld. 26 March 2001.
Case Studies
Juniper Networks Inc
A provider on Internet infrastructure
solutions that enable Internet service
providers and other telecommunications
service providers to meet the demands
resulting from the rapid growth of the
Internet
Source: “Standard & Poor’s Corporate Descriptions plus News.” The McGraw-Hill Companies.
Lexus-Nexis Academic. 8 November 2001.
Juniper Networks
Incorporated in 1996 in CA
IPO of common stock in June 1999
$34/share of 4.8 million shares
 Net proceeds = $163 million

Has 927 Employees
Operates out of Sunnyville, CA
Offices in 30 countries around the world
Source: “Standard & Poor’s Corporate Descriptions plus News.” The McGraw-Hill Companies.
Lexis-Nexis Academic. 8 November 2001.
Juniper Networks
Name
Title
Age
Scott Kriens
Chairman, President, CEO
43
Pradeep Sindhu, PhD
Marcel Gani
Peter Wexler
Vice Chairman, CTO
CFO
VP of Engineering
48
48
45
Source: “Standard & Poor’s Corporate Descriptions plus News.” The McGraw-Hill Companies.
Lexis-Nexis Academic. 8 November 2001.
Juniper Networks
Main Product is:

M Series Internet backbone routers
Customers include:
Cable & Wireless
 Qwest Communications
 Verio
 MCI WorldCom

Top Competitors are:
Nortell Networks
 Cisco Systems
 Avici Systems

Source: “Standard & Poor’s Corporate Descriptions plus News.” The McGraw-Hill Companies.
Lexis-Nexis Academic. 8 November 2001.
Juniper’s Finances
(in thousands)
1998
1999
2000
Revenues
3,807
102,606
673,501
Net
Income
(30,971)
(9,034)
147,916
Total
Assets
N/A
513,378
2,103,129
Source: “Standard & Poor’s Corporate Descriptions plus News.” The McGraw-Hill Companies.
Lexis-Nexis Academic. 8 November 2001.
Juniper’s Performance
Source: www.quicken.com
Case Studies
Amazon.com Inc
World’s leading online retailer.
Company directly offers for sale millions
of distinct items in categories such as
books, music, DVDs, videos, toys
electronics, software, video games and
home improvement products.
Source: “Standard & Poor’s Corporate Descriptions plus News.” The McGraw-Hill Companies.
Lexis-Nexis Academic. 8 November 2001.
Amazon.com
Launched in 1995 by founder Jeff
Bezos
IPO of common stock in May 1997
$18/share of 3 million shares
 Net proceeds = $54 million

Has 9000 Employees
Operates out of Seattle WA
Source: “Standard & Poor’s Corporate Descriptions plus News.” The McGraw-Hill Companies.
Lexis-Nexis Academic. 8 November 2001.
Amazon.com
Name
Jeffrey Bezos
Title
Chairman, President, CEO
Warren Jenson Sr. VP, CFO
Richard Dalzell Sr. VP, CIO
Diego Piacentini Sr. VP, General Mgr. Intl.
Source: “Standard & Poor’s Corporate Descriptions plus News.” The McGraw-Hill Companies.
Lexis-Nexis Academic. 8 November 2001.
Age
37
44
43
40
Amazon.com
Products and Services include:

Books, music,DVDs, videos, consumer
electronics, toys, camera and photo items,
software, computer and video games, tools and
hardware, lawn and patio items, kitchen
products and wireless products
Customers: 30 million Worldwide
Top Competitors are:
 Barnes
& Noble
 CDnow
 eBay
Source: “Standard & Poor’s Corporate Descriptions plus News.” The McGraw-Hill Companies.
Lexis-Nexis Academic. 8 November 2001.
Amazon’s Finances
(in thousands)
1998
1999
2000
Revenues
609,819
1,639,839
2,761,983
Net
Income
(124,546)
(719,968)
(1,411,273)
Total
Assets
N/A
2,465,850
2,135,169
Source: “Standard & Poor’s Corporate Descriptions plus News.” The McGraw-Hill Companies.
Lexis-Nexis Academic. 8 November 2001.
Amazon’s Performance
Source: www.quicken.com
Case Studies
Yahoo! Inc
Global internet communications, commerce
and media company that offers a
comprehensive branded network of services
to more than 120 million users each month
worldwide. WWW.YAHOO.COM was the first
online navigational guide to the World Wide
Web (WWW).
Source: “Standard & Poor’s Corporate Descriptions plus News.” The McGraw-Hill Companies.
Lexis-Nexis Academic. 8 November 2001.
Yahoo!
Incorporated in CA on Mar 5 1995

Again in Delaware May 18 1999
IPO of common stock in April 1996
$13/share of 2.6 million shares
 Net proceeds = $33.8 million

Has 3259 Employees
Operates out of Santa Clara CA
Source: “Standard & Poor’s Corporate Descriptions plus News.” The McGraw-Hill Companies.
Lexis-Nexis Academic. 8 November 2001.
Yahoo!
Name
Terry Semel
Title
Chairman, CEO
Jeffrey Mallett President, COO
Susan Decker CFO, Sr. VP of Fin & Admin
Farzad Nazem Sr. VP of Comm & Tech Serv, CTO
Source: “Standard & Poor’s Corporate Descriptions plus News.” The McGraw-Hill Companies.
Lexis-Nexis Academic. 8 November 2001.
Age
58
36
38
39
Yahoo!
Services include:

Internet portal, search engine, directory for the
web, allows registered users personalized web
pages, free email and calendars
Customers: 120 million users a month
Top Competitors are:
 America
Online
 Microsoft
 Terra Lycos
Source: “Standard & Poor’s Corporate Descriptions plus News.” The McGraw-Hill Companies.
Lexis-Nexis Academic. 8 November 2001.
Yahoo! Finances
(in thousands)
1998
1999
2000
Revenues
245,132
591,786
1,110,178
Net
Income
(13,641)
47,811
70,776
Total
Assets
N/A
1,520,129
2,269,576
Source: “Standard & Poor’s Corporate Descriptions plus News.” The McGraw-Hill Companies.
Lexis-Nexis Academic. 8 November 2001.
Yahoo’s Performance
Source: www.quicken.com.
Case Studies
Pfizer Inc
Anheuser Busch Companies Inc
Wal Mart Stores Inc
Citigroup Inc
Performance
Pfizer
Anheuser Busch
Wal Mart
Citigroup
Source: www.quicken.com
Lessons Learned
Good things can come from bad
situations – the funding from investors
allows us to move forward with
technology.
If it looks to good to be true, it probably
is!
Don’t put all your eggs in one basket!
The 5 Pack
Economically R & D Driven Consumer
Driven
Driven
Technology
Driven
Consumer &
Economic
Driven
BAC
PFE
PEP
MSFT
WAG
C
MRK
KO
CSCO
WMT
JPM
JNJ
MCD
SUN
HD
WFC
GRB
BUD
ORCL
LOW
Source: Interview with Ben Worley, Investment Rep. From Edward Jones, Sept. 7, 2001.
The End!
Thank You