Internet companies feel economic pinch
Previously resilient to the woes of the troubled U.S. economy, Internet companies have finally succumbed to the downturn, the New York Times reports
On Friday, the Dow dropped more than 7 percent and the Nasdaq more than five percent. The day before, one analyst, Benjamin Schachter of UBS, lowered third-quarter estimates on companies such as Google Inc., Yahoo Inc., and eBay Inc., whose shares dropped 2.7 percent, 8.1 percent, and 6.2 percent., respectively. Surpassing those was Amazon.com, which dropped by 8.2.
UBS was "lowering our estimates and price targets across the board to reflect a deteriorating macroeconomic environment that we expect will inevitably impact the online advertising market and consumer spending, likely continued unfavorable foreign currency fluctuations (at least in the near term), as well as other company specific factors," Schachter said.
"We view Google as some what better positioned for a recession than its peers, but we see no business model based on advertising or consumer spending that will be immune to a downturn," he said.