Coastal Capital Acquisition Corp (CCAJ)

[micasey123]

How much would you pay for EZTO ? I would love it if we can get only 1% of the MC of Yhoo,ebay,amzn,goog..

What Internet investors will pay
http://www.marketwatch.com/news/yhoo/story.asp?guid=%7BF192457B-A5EA-4D23-9F9D-4EFC7AB7A035%7D&s....


SAN FRANCISCO (MarketWatch) - Looking back on a week which saw Amazon shares plunge after Google soared to new highs, Internet investors may be feeling they're getting reacquainted with an old friend: volatility.

Google's rise alters Internet valuations
Investors ignore risk, reach for return


For those who own both Amazon (AMZN: news, chart, profile) and Ebay (EBAY: news, chart, profile) , the 16 percent drop in Amazon Thursday in the wake of a fourth-quarter earnings miss must have felt like a recurring bad dream. On Jan. 20, Ebay's shares fell 19 percent after its 2005 forecast disappointed on higher costs.

A

s the dust settles on earnings season and Wall Street analysts are mostly done updating their initial estimates for this year, it's worth a look at how the reduced valuations of those two Internet stocks compare to those of Yahoo (YHOO: news, chart, profile) and Google (GOOG: news, chart, profile) .

See chart comparing Internet valuations.

Despite their roughly 7 percent rise this week and $205 price tag, Google shares are still less expensive than Yahoo's -- and about equal to eBay's -- when measured by the important metric of price-to-earnings ratio.

That's because Google is by far the most profitable of the big four Internet names, with analysts expecting it to post earnings of $3.92 a share for all of 2005. At its current price, then, Google carries a forward-looking P/E ratio of 53.

Yahoo, meanwhile, with an expected full-year profit of 52 cents a share and a stock price of $35, has a P/E ratio of 67. The two companies, both Silicon Valley icons founded by pairs of Stanford graduate students, are boosting earnings-per-share at about the same rate of 44 percent.

EBay is expected to increase 2005 earnings by 27 percent, to $1.53 a share, which may explain why investors have given it a slightly lower P/E ratio of 49, based on a $75 stock price.

Amazon is boosting its bottom the line the slowest, with profit expected to rise just 14 percent this year to $1.06 a share. Given that its growth is lagging the other three largest Internet firms, it's no surprise that its stock, at a share price of $35, carries the lowest P/E ratio of 33.

Investors who use such metrics to evaluate their portfolio holdings may want to remember an important lesson learned the hard way during the Internet stock boom of the late 1990's. Analyst estimates are merely estimates, and they are likely to change - sometimes drastically - as the year wears on.