This is a chart from Bill Rempel, a.k.a No DooDahs, who gives us an annotated 4-year look at the S&P (click for larger image)..
What strikes me the most is the equivalent of what I was feeling on Friday Morning – the RSI indicator flew down on very little movement while the VIX remains fairly tame (but up 10% yesterday) AND we remain pinned along the top of a very bullish channel! I love good chart guys, they really can make a picture say a thousand words:..
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Rather than get into it here and start a full-on war between "bloggers" and "jounalists," I will just mention that the "Mainstream Media" in the guise of Ziff-Davis (no relation) and the WSJ have both decided ’tis the season to call an end to this "blogging fad."
Gartner (who gets paid by the media) predicts that, in 2007, the number of bloggers will peak out at around 100 million. Aside from the fact that that’s a stunning number in and of itself, they are basing this on the logic that 2 out of 3 people who start a blog quit.
Since 9 out of 10 new businesses fail, I suppose by that logic that the number of businesses has peaked too and that we should shut down all the business schools before people waste more money on them (wait, we might be onto something there!).
The WSJ, on the other hand, was much more direct in their attack and, in fact, downright insulting but we said our piece over at Information Arbitrage (check out my comments if you want to see me a little less nice than usual) and I won’t get into it here as I could literally go on all weekend I’m so pissed!
To say Gartner is off by a mile would likely be the understatement of the centrury – of the 300M people who’ve started blogs, 100M are still in use. There are over 2Bn people with access to the Internet and, so far, just 15% have tried blogging. Even if that ratio just continues, Gartner’s own predictions for Internet penetration indicate that there will be another 50M blogs by 2010.
The "mainstream media" fears blogs at those 100M blogs divert your eyeballs from them and their sponsors while their sponsors hate blogs because they can’t control the message that is reaching the public. Remember it is the concentration of advertising dollars that gives the sponsors effective control over what you are told to be true every day. The Internet had already started breaking that down by giving you easy access to alternative publications but now we don’t even need the publishers and that, my friends, it terrifying "the establishment."
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Speaking of empowering the bloggers, it’s Google that makes this all possible (and generates massive ad revenues from those 100M blogs). Here’s a fabulous piece of research by Rich Skrenta on Google’s true market share – crediting them with a stunning 70%, vs. the 40% they are generally attributed with having. Henry Blodget points out that, if they already have 70% – how much can they possibly grow?
Well I already know how to add a $Billion a year to their revenues and they must have somebody smarter than me somewhere in the GooglePlex so I’m sure a company with $10Bn in revenue and $10Bn in cash will come up with something (of course we did think that about Microsoft didn’t we?). This may explain the sudden flight out of Google last week as investors get nervous that "this is it" for their growth.
WHile it is possible, the "mainstream media" still collects upwards of $500Bn in advertising revenues every year (I wrote a whole bit on this a while back) that is shrinking while Goolge is generating "just" $10Bn a year in the only advertsising segment that is growing. Add that to the fact that MSFT has $45Bn in revenues and TWX has $43Bn, you have to think there’s still some room for Google to grow.
As you can see, I’ve been debating myself re. whether it is time to make our Google plays!
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Nice article on SNDK by Shlomi Cohen who says that the stock may have been "gamed down" a bit and that there are many postive signal developing for January.
