Tài liệu Nothing But Net 2009 Internet Investment Guide 1 docx

Global Equity Research
05 January 2009


Nothing But Net


2009 Internet Investment Guide


Global Internet
Imran Khan
AC
(1-212) 622-6693

J.P. Morgan Securities Inc.
Bridget Weishaar
(1-212) 622-5032

J.P. Morgan Securities Inc.
Lev Polinsky, CFA
(1-212) 622-8343

J.P. Morgan Securities Inc.
Vasily Karasyov
AC
(1-212) 622-5401

J.P. Morgan Securities Inc.
China Internet
Dick Wei

AC
(852) 2800-8535

J.P. Morgan Securities (Asia Pacific) Limited
Russia Internet
Elena Bazhenova
AC
(7-495) 937-7314

J.P. Morgan Bank International LLC
Korea Internet
Angela Hong
AC
(82-2) 758-5719

J.P. Morgan Securities (Far East) Limited
See page 332 for analyst certification and important disclosures, including non-US analyst disclosures.
J.P. Morgan does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may
have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their
investment decision. Customers of J.P. Morgan in the United States can receive independent, third-party research on the company or companies
covered in this report, at no cost to them, where such research is available. Customers can access this independent research at
www.morganmarkets.com or can call 1-800-477-0406 toll free to request a copy of this research.
Please see our separate notes out today
changing ratings for Amazon and Dice
Holdings. We also have a separate note
out today changing estimates and
introducing 2009 price targets for the
remainder of our Internet coverage. All
data and valuation priced as of 30
December 2008.

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Table of Contents
Key Investment Themes ..........................................................5
Dot.Khan’s Top Ten Things to Watch for in 2009................15
U.S. Sector Outloooks............................................................17
Search Advertising Outlook ..................................................19
Graphical Advertising Outlook..............................................25
Ad Networks on the Rise .......................................................29
Ad Exchanges: A New Marketplace......................................37
eCommerce Outlook ..............................................................40
Online Travel Outlook............................................................47
The Mobile Market..................................................................53
Online Payment Outlook........................................................62
Social Networks Primer .........................................................70
Online Music Primer...............................................................78
The Challenges for Online Video ..........................................81
Widgets: Popularity Is Growing, but Can It Be Monetized?83
Online Photo Market Outlook................................................86
Cloud Computing Outlook.....................................................90
Virtual Online Worlds Primer.................................................95

Internet for Social Good.......................................................100
International Sector Outlooks .............................................103
China Internet Market Overview..........................................105
Russia Sector Outlook.........................................................140
Korean Internet Outlook ......................................................150
U.S. Company Previews.......................................................155
Amazon.com, Overweight, ($50.76) ....................................157
Blue Nile, Inc., Underweight, ($23.67).................................166
Dice Holdings, Neutral, ($4.11)............................................174
eBay, Neutral, ($13.96) .........................................................181
Expedia, Overweight, ($7.80)...............................................191
Google, Overweight, ($303.11) ............................................198
IAC, Neutral, ($15.77)............................................................205
MercadoLibre, Overweight, ($15.69)...................................213
Omniture, Overweight, ($9.85).............................................222
Orbitz Worldwide, Neutral, ($3.65) ......................................229


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Priceline, Overweight, ($70.82)............................................235
RealNetworks, Inc, Neutral, ($3.55).....................................243
Shutterfly, Inc., Overweight ($6.75).....................................249
ValueClick, Neutral, ($6.56)..................................................257
Yahoo!, Overweight, ($11.97) ..............................................264

International Company Outlooks........................................273
Baidu, Overweight, ($126.93)...............................................275
China Finance Online, Neutral, ($7.05)...............................282
NetEase, Neutral, ($22.10)....................................................289
Ninetowns, Neutral, ($0.83)..................................................295
Shanda, Overweight, ($30.75)..............................................300
Sina, Overweight, ($22.89)...................................................306
Sohu, Overweight, ($46.22)..................................................312
The9, Overweight, ($13.68) ..................................................318
UOL, Neutral, R$7.3..............................................................324

Note: ValueClick is covered by U.S. Advertising & Marketing Services analyst Townsend Buckles. UOL is covered by
Latin American Media & Internet analyst Andre Baggio. RealNetworks is covered by Vasily Karasyov.
The authors acknowledge the contribution of Jigar Vakharia of J.P. Morgan Services
India Private Ltd., Mumbai, and Shelby Taffer, of J.P. Morgan Securities, Inc., to
this report.



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Figure 1: J.P. Morgan Internet Technology Universe
$ in millions, except per share data
Ticker Rating
Price Mkt Cap Ent .Val. EPS Y/Y EPS Growth Cal PE PEG EBITDA ($M) Y/Y EBITDA Growth Ent. Val/EBITDA Rev ($M) Y/Y Revenue Growth

12/30 12/30 12/30 2008E 2009E 2010E '07/'08E '08/09E 09/10E 2008E 2009E 2010E 2008E 2009E 2010E 2008E 2009E 2010E '07/'08E '08/09E '09/10E 2008E 2009E 2010E 2008E 2009E 2010E '07/'08E '08/09E '09/10E
Search/Advertising
Google GOOG OW 303.11 96,321 83,789 19.23 21.16 25.26 23% 10% 19% 15.8 14.3 12.0 0.5 0.4 0.3 9,142 10,210 12,278 32% 12% 20% 9.2 8.2 6.8 15,689 17,597 21,762 35% 12% 24%
Yahoo* YHOO OW 11.97 16,729 7,857 0.63 0.33 0.32 34% -48% -3% 18.9 36.3 37.6 0.8 1.5 1.5 1,779 1,847 1,901 -8% 4% 3% 4.4 4.3 4.1 5,422 5,400 5,877 6% 0% 9%
Group Average 17.3 25.3 24.8 0.6 0.9 0.9 12% 8% 12% 6.8 6.2 5.5 20% 6% 16%
Leading e-Commerce brands
Amazon AMZN OW 50.76 22,131 20,627 1.32 1.20 1.54 18% -9% 28% 38.4 42.4 33.1 1.9 2.1 1.7 1,398 1,419 1,734 28% 2% 22% 14.8 14.5 11.9 18,711 21,694 26,165 26% 16% 21%
Blue Nile NILE UW 23.67 360 333 0.94 0.76 0.95 -10% -19% 25% 25.3 31.2 24.9 1.3 1.6 1.2 29 26 34 -4% -10% 30% 11.6 12.9 9.9 310 293 323 -3% -6% 10%
Dice DHX N 4.11 271 302 0.35 0.28 0.29 34% -20% 2% 11.7 14.5 14.2 0.6 0.7 0.7 67 64 68 7% -5% 6% 4.5 4.7 4.5 156 147 154 9% -6% 5%
eBay EBAY N 13.96 17,994 13,812 1.35 1.39 1.57 NA 3% 13% 10.4 10.1 8.9 0.4 0.4 0.4 3,101 3,202 3,470 7% 3% 8% 4.5 4.3 4.0 8,690 9,572 10,770 13% 10% 13%
Expedia EXPE OW 7.80 2,275 2,753 1.30 1.26 1.40 6% -3% 11% 6.0 6.2 5.6 0.6 0.6 0.6 781 756 883 7% -3% 17% 3.5 3.6 3.1 2,964 2,919 3,288 11% -2% 13%
InterActive Corp IACI N 15.77 2,209 842 0.34 1.02 1.10 NA NA 7% 46.7 15.4 14.4 4.7 1.5 1.4 176 234 258 25% 33% 10% 4.8 3.6 3.3 1,476 1,548 1,687 11%5%9%
Mercadolibre MELI OW 15.69 695 632 0.36 0.54 0.75 65% 50% 38% 43.4 28.9 21.0 1.4
1.0 0.7 40 50 69 70% 27% 36% 15.9 12.5 9.2 138 164 219 62% 19% 34%
Orbitz Worldwide OWW N 3.65 304 304 (3.63) (0.27) (0.30) NA NA 9% NM NM NM NM NM NM 145 136 143 -1% -6% 5% 2.1 2.2 2.1 895 865 922 6% -3% 7%
Priceline.com PCLN OW 70.82 3,460 3,005 5.79 5.64 7.40 43% -3% 31% 12.2 12.6 9.6 0.8 0.8 0.6 365 336 439 60% -8% 30% 8.2 8.9 6.9 1,851 1,837 2,081 33% -1% 13%
Real Networks RNWK N 3.55 504 98 (0.05) 0.02 0.02 NA NA 39% NM NM NM NM NM NM 58 71 72 1% 21% 2% 1.7 1.4 1.4 607 595 609 7% -2% 2%
Shutterfly SFLY OW 6.75 169 129 0.30 0.43 0.64 -38% 42% 48% 22.3 15.7 10.6 1.1 0.8 0.5 33 49 62 1% 49% 26% 3.9 2.6 2.1 209 224 266 12% 8% 19%
Group Average 24.0 19.7 15.8 1.4 1.1 0.9 18% 9% 18% 6.9 6.5 5.3 17% 4% 13%
Enabling Platforms
Akamai^ AKAM NR 14.46 2,589 2,344 1.61 1.71 1.87 7% 9% 0% 8.4 7.7 7.7 0.3 0.3 0.3 364 409 420 12% 12% 0% 5.7 5.1 5.1 784 882 975 25% 13% 11%
Omniture OMTR OW 9.85 752 773 0.42 0.61 0.77 NM 44% 26% NM 16.2 12.8 NM 0.5 0.4 59 77 98 164% 31% 26% 13.1 10.0 7.9 296 410 511 107% 38% 25%
Salesforce.com^ CRM NR 30.96 3,724 3,194 0.32 0.52 0.85 69% 50% 0% 59.6 39.7 39.7 1.5 1.0 1.0 159 229 218 31% 44% -5% 24.3 13.9 14.7 1,083 1,350 1,591 46% 25% 18%
Websense^ WBSN NR 14.27 646 720 1.36 1.41 1.52 3% 10% 0% 10.2 NA NA 0.7 NA NA 138 124 130 126% -10% 5% 5.2 5.8 5.5 346 354
371 51% 2% 5%
Group Average 26.1 21.2 20.1 0.8 0.6 0.6 83% 19% 7% 12.1 8.7 8.3 57% 19% 14%
J.P. Morgan Internet Technology Universe

Source: Company reports and J.P. Morgan estimates for J.P. Morgan rated companies; Factset/First Call estimates used for non-covered companies. EBITDA = Operating Income + D&A +/- extraordinary charges
Data in this table and this report is priced as of December 30, 2008 close

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Global Equity Research
05 Januar
y 2009
Imran Khan
(1-212) 622-6693

Key Investment Themes
Macroeconomic Conditions Will Likely Dominate
Performance
2008 was an extraordinary year, as the fallout from the mortgage business nearly
crippled U.S. financial systems. The financial sector underwent a massive
restructuring, with Lehman Brothers filing for bankruptcy, the government seizing
control of Fannie Mae and Freddie Mac, the government bailing out AIG, Goldman
Sachs and Morgan Stanley reorganizing as bank holding companies, and Bear
Stearns, Merrill Lynch, Wachovia, and WaMu, among others, ceasing to operate as
independent entities. Financial sector instability and mark-to-market losses almost
froze the credit market, leading to cash flow problems for both businesses and
consumers. A Zillow.com report estimates that American homeowners will
collectively lose more than $2 trillion in home value by the end of 2008. Meanwhile,
the U.S. auto industry sits on the verge of bankruptcy without a government bailout.
All of these events significantly impacted the overall economy, and we are facing the
worst recession since the ’70s.
The Internet industry is not immune from this recession. We expect significant
revenue growth deceleration (in some cases negative growth) for Internet companies
in 2009. However, we continue to see strong long-term fundamentals with worldwide
Internet penetration continuing to rise, newspaper and magazine businesses

continuing to lose ad spend market share, and consumer dependence on mobile and
Internet devices rising. We believe 4Q’08 and 1Q’09 will be the toughest financial
quarters for Internet companies, as we expect limited credit availability, weaker
foreign exchange currency rates, low consumer confidence, increased
unemployment, and cautious corporate expense control to plague companies.
However, we expect to see the economy stabilize in 2Q and modestly improve in
2H’09. The J.P. Morgan economic forecast calls for (1.6)% Y/Y Real GDP growth in
F’09, with 2H growth accelerating to (1.0)% Y/Y.