JPMorgan Predicts 2008 Will Be “Nothing But Net”
JPMorgan's Internet analyst Imran Khan and his team released a massive 312-page report this morning titled Nothing But Net that paints a bullish picture for the major Internet stocks (Google, Amazon, Yahoo, eBay, Expedia, Salesforce.com …
Context & Ripple Effects
Imran Khan's 312-page 'Nothing But Net' lands at the high-water mark of a running sell-side bull argument: Silicon Alley Insider floated a $2,000-a-share Google target back in October 2007, Paul Kedrosky made the contrarian case for Yahoo outperforming Google in 2007, and the Economist's Technology in 2008 outlook set a broadly optimistic tone for the year. What distinguishes the JPMorgan report is scale and specificity — it bundles Google, Amazon, Yahoo, eBay, Expedia and Salesforce.com into one house view.
The syndicated pickups show the story travelling well beyond TechCrunch: MediaPost highlights the call for online ad CPMs to 'accelerate' with search hitting $30.5 billion, and paidContent flags projected 34 percent internet EPS growth. Separately, unconfirmed chatter has Yahoo back in play as an acquisition target despite its roughly $33.5 billion market cap limiting the buyer pool.
First-order effects
- Portfolio managers get a single reference framework for the sector: Khan's team gives explicit 2008 targets — accelerating CPMs, a $30.5 billion search market, 34 percent EPS growth — covering six of the largest internet names at once.
- Yahoo enters the year carrying two competing narratives: JPMorgan's bullish fundamentals call and the rumored takeover interest that its $33.5 billion valuation makes hard to act on.
Second-order effects
- If CPMs accelerate as the report projects, display-heavy sellers such as Yahoo gain pricing leverage while advertisers pay more for the same reach, pushing marginal budget toward performance-priced search where Google dominates.
- Rival banks' internet analysts now have to publish numbers against a 312-page benchmark, making estimate revisions through the coming earnings season higher-stakes than usual.
Third-order effects
- When one house view covers the group as a single trade, a shared demand shock would reprice all six names together rather than company by company — concentration of the bull case is itself a risk.
- The deeper shift is Wall Street treating online advertising as a core macro indicator rather than a niche growth story, with analyst coverage and capital allocation migrating accordingly.
The trend: Sell-side research is reframing internet advertising from a niche growth story into a top-down macro sector whose aggregate numbers anchor whole-portfolio positioning.