JPMorgan’s Internet analyst Imran Khan and his team released a massive 312-page report titled Nothing But Net that paints a bullish picture for the major Internet stocks (Google, Amazon, Yahoo, eBay, Expedia, Salesforce.com, Ominiture, ValueClick, Monster.com, Orbitz, Priceline, CNET, etc.). (From TechCrunch)

2007 saw Internet companies outperform the broader stock market, as the HHH rose ~14%, vs. a ~5% rise in the S&P 500. We believe some of the factors that drove F’07 outperformance will persist into F’08, and thus expect the sector to outperform the broader market.

• Expect 34% EPS Growth, vs. 8% for the S&P 500. We expect revenue growth to decelerate to 21.2% in F’08, from 25.6% in F’07. We are projecting 34% earnings growth for our coverage universe, compared to 8% for the S&P 500.

• Expect Blended CPM Pricing Growth Rate to Accelerate. We think blended CPM pricing bottomed out in F’07. We expect tighter offline inventory and better monetization techniques will lead to a re-acceleration of growth in F’08.

• Global Consumer Growth Should Benefit Internet Companies. World GDP growth has outpaced US growth in recent years, and a projected 3-year CAGR of 6.5% for emerging economies means hundreds of millions of new consumers. We think large Internet companies’ global reach means they’ll benefit from this rising tide.

• M&A Market Likely to Remain Healthy. The five biggest companies in our universe generated $8.8B in FCF in F’07, a number we project will grow to $12.5B in F’08. While some of that cash should continue to fund share repurchases, we think a significant portion of the incremental cash flow is likely to lead to continued M&A in the sector.

• Top Picks. The above trends translate into our top Overweight ideas going into the new year: GOOG, YHOO, EXPE, OMTR, SFLY and MNST.

Download Nothing But Net: 2008 Internet Investment Guide

PDF format, 2.3MB, 312Pages.

JPMorgan Report. January 02, 2008

Download Nothing But Net: 2008 Internet Investment Guide

Provided by Global Entrepreneur: The Leading Business Magazine in China. 

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Imran Khan and the JPMorgan Internet, Media and Entertainment team:

Imran Khan
Imran Khan is a Managing Director and the Senior Internet, Media and Entertainment Analyst at JPMorgan. Mr. Khan ranked #2 for Internet in the Institutional Investor All America Research Poll in 2005, 2006, and 2007. Additionally, he has been consistently recognized as one of the top Internet analysts in the Greenwich Research Poll since 2005. Mr. Khan has authored several widely read research reports, including past editions of the Nothing But Net report, as well as “The Rise of Ad Networks” and “Large Cap Courtship and Consolidation”. Mr. Khan is a sought-after speaker and has presented at leading industry conferences such as Ad-Tech, Red Herring, AlwaysOn, and Young & Rubicam Digital Day. Mr. Khan has also received invitations as a guest speaker at multiple universities.

Mr. Khan came to JPMorgan in 2004 after three years at Fulcrum Global Partners, where he was a Managing Director in Equity Research covering Internet and Software. Prior to Fulcrum, Mr. Khan worked as an investment banker at ING, covering Telecom. Before ING, he worked for Wild Blue, a satellite start-up company. Bridget Weishaar Bridget Weishaar joined the JPMorgan Internet, Media and Entertainment team in 2006. Prior to JPMorgan, Ms. Weishaar was a member of the Retail team at Bear Stearns, which ranked #1 in the Institutional Investor All America Research Poll in 2005. Ms. Weishaar obtained her MBA at the Wharton School, University of Pennsylvania, and holds a B.S. from the University of Notre Dame.

Joseph Boushelle
Joe Boushelle joined the JPMorgan Internet, Media and Entertainment team in 2007. Previously, Mr. Boushelle covered the oil and gas sector for a credit trading group. Mr. Boushelle is a CFA charterholder, and received an M.B.A. with distinction from Cornell University and a B.A. in Economics from the University of Chicago. Lev Polinsky Lev Polinsky joined the JPMorgan Internet, Media and Entertainment team in 2006. Prior to JPMorgan, Mr. Polinsky was a trader at Susquehanna Investment Group, covering a variety of industries. Mr. Polinsky is a CFA charterholder, and received an A.B. in Economics from Harvard University.

Vasily Karasyov
Vasily Karasyov joined the JPMorgan Internet, Media and Entertainment team in 2006, focusing on Media and Entertainment companies. Prior to JPMorgan, he was an Executive Director, Corporate Development at Sony Pictures, where he worked on M&A and financing transactions, as well as strategic planning in film, television, home entertainment and new media. Mr. Karasyov holds an MBA from INSEAD.

Dick Wei
Dick Wei’s primary research focus is on China Internet. In addition, he is also responsible for global technology research. Prior to joining JPMorgan in 2002, Mr. Wei worked with Merrill Lynch in the Hong Kong and New York offices. He was also a design engineer at Quantum Corporation (acquired by Maxtor). Mr. Wei graduated with an MBA from the Wharton School and obtained his M.Sc. degree in mechanical engineering from Stanford University.

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