Calling the Internet one of the most dynamic, interesting, and seemingly unpredictable areas within global economies and markets, the technology equity analysts at S&P Capital IQ have published their Internet predictions for the next twelve months.
“We are always keen to produce our yearly Internet predictions,” said Scott Kessler, S&P Capital IQ Equity Analyst, Tech sector Group Head at S&P Capital IQ. “We try to identify key themes, trends, companies, and stocks to help frame thinking and opinions about this important segment.”
Following are twelve Internet predictions for 2012 from equity analysts at S&P Capital IQ.
1. Yahoo will finally take action to sell some or all of its investments in Alibaba Group and Yahoo Japan, and may see its shares rise to about $20 in 2012.
2. More Chinese Internet companies, such as Alibaba, to pursue growth outside of China. Alibaba will look to increase its focus on, and presence in, the U.S.
3. Google will experience further legal and regulatory problems in the U.S. and around the world, and foresee the potential for over $1 billion in fines and penalties.
4. Along those lines, S&P analysts don’t expect Google to be able to close on its planned purchase of Motorola Mobility until mid-year at the earliest. There’s a small chance the company won’t consummate the transaction.
5. According to S&P Capital IQ, 2012 will be an important year for mobile payments, but that Google and Google Wallet won’t be leading the way. Rather, it expects eBay’s payments business, led by PayPal, to become much more of a force in the mobile area and bolster its presence in retail locations. And eBay could look to spin off its payments unit as an IPO, or even be renamed PayPal.
6. Contrary to the view of many, S&P analysts don’t expect 2012 to be a banner year for mobile advertising.
7. Despite concerns about growing disruptions and competition from the likes of Google, the new year will be a good one for online travel companies Expedia and priceline, reflecting international growth aided by more stability in Europe and gains in Asia, coupled with a solid domestic economy.
8. Cybersecurity will become an even more important issue in 2012. One notable and perhaps unexpected potential beneficiary will be Akamai Technologies, which is building a security business. Akamai is expected to roll out new related offerings and partnerships in 2012.
9. EarthLink will continue to push towards its transformation from ISP to Internet network services company and achieve related successes and recognition.
10. There will be at least a $1 billion offer from private equity firms to buy an Internet company. According to Capital IQ data, the largest-ever private equity purchase of an Internet company was for $572 million, when Bankrate was acquired in July 2009.
11. InfoSpace will finally announce a significant M&A-related use for its considerable cash and investments.
12. An Internet company that completed an IPO in 2011 could be acquired in 2012, reflecting the considerable challenges of being a public company.
S&P Capital IQ, a brand of the McGraw-Hill Companies, is a leading provider of multi-asset class data, research and analytics to institutional investors, investment advisors and wealth managers around the world.