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Cheap Stocks: Amazon.com

This post is part of a series featuring bargain stocks that are worth a look now. See more Cheap Stocks.

In my opinion, Amazon.com (NASDAQ: AMZN) has two major fundamental advantages. First, we're talking about a dot-com company that survived the dot-com bubble. This is an impressive achievement, on par with Julia Louis-Dreyfus finding success with a second sitcom after Seinfeld.

Second, I caught a bit of Oprah recently when I was home sick with a head cold. Her special guest was Amazon chief Jeff Bezos, and the topic of the day was how much Oprah loves the Kindle reader. Not only did everybody in the audience get a free Kindle, but Ms. Winfrey actually bellowed, "Kiiiinnnnnnnnn-dullllllll!" ("Thank you," stammered Bezos, no doubt overwhelmed by her all-powerful stamp of approval.)

Oprah aside, the key to Amazon's survival so far has been its willingness to adapt. What was once a humble online bookstore is now the internet equivalent of a general store -- on today's Amazon.com, you can pick up a new motherboard for your PC, a pair of winter boots, and a box of popcorn in one fell swoop. The company offers a slew of familiar brand names, which should make the site a popular stop for holiday shopping.

Continue reading Cheap Stocks: Amazon.com

Companies that vanished: Pets.com -- the sock puppet dies

This post is part of a series on some of the most memorable companies that have disappeared.

What goes up, must come down. It was a cute ad. Who knew it would turn out to be so prophetic?

Pets.com will go down in history as a textbook example of dot-com flame-out, going from IPO to liquidation in nine short months.

Founded in 1998, the company, which had the bright idea of selling pet food and supplies to the public via the internet, went public in February 2000 and raised $82.5 million.

Continue reading Companies that vanished: Pets.com -- the sock puppet dies

Yahoo VP of sales strategy Jacki Kelley resigns

Yahoo (NASDAQ: YHOO) logoYahoo (NASDAQ: YHOO) has lost another high-roller exec. Jacki Kelley, the former VP of sales strategy, has announced she is leaving to work at Martha Stewart Living Omnimedia (NYSE: MSO) as media sales EVP. This is yet another large loss for Yahoo, which has seen many high-profile executive departures in the last year, as well as a complete makeover of the top folks in charge. I'm still befuddled on why former CEO Terry Semel is chairman of the company to be honest.

It's unclear whether Kelley was pushed out or chose to leave to pursue another opportunity, but in reading the company's exit message to Yahoo employees, the tone makes one think she was gently nudged to exit the doors. The advertising strategy team is being called into question here as one of the web's largest properties still can't catch market leader Google (NASDAQ: GOOG) when it comes to monetizing efforts built around web advertising.

Is Yahoo going to cede the advertising race to Google (outside of display advertising) one of these days and just integrate the competitor's search backbone into its overall property to focus on different types of internet advertising? That's been bandied about in the last few months as the initial furor over Yahoo!'s Project Panama has quieted down to a whimper in the face of being extremely late to market and underwhelming, given Google's continuing search advertising enhancements.

Compuware posts first full-year revenue growth since 2000

The dot-com bust may finally be over. Tech company Compuware Corporation (NASDAQ: CPWR) posted 4Q 2007 earnings and FY 2007 earnings, both of which were good. 4Q 2007 revenues totaled $313 million, with net income of $67.5 million. Diluted EPS was $0.21. Revenues break down into just over $73 million for software license fees, $118 million for maintenance fees, and $122 million for service fees.

Compuware has been busy these past several quarters. In 4Q it completed the acquisition of Proxima Technology, and also launched a bundle of software testing services called Compuware Test Factory. It will partner with IT service company Atos Origin to provide outsourced software testing services worldwide. Domestically, Compuware partnered with health care management giant CIGNA (NYSE: CI) to provide the structure for health care information exchange between medical providers and insurance companies. Compuware also introduced applications designed to provide additional security for mainframe data storage. It also expanded the availability of Compuware Unifaec 9.1, designed to work across Web, Windows, Unix, or mainframe platforms.

These initiatives contributed to Compuware's good FY 2007 numbers, the first full-year revenue growth since 2000. FY revenues were $1.2 billion with net income of $158 million, an increase of 10%. FY diluted EPS is $0.45, a 21% increase. FY revenue breakdown is $283.4 million for software license fees, $457.6 million for maintenance fees, and service fees of $472 million. Already more than 90% of Fortune 100 companies use Compuware to increase efficiency, control costs, and improve productivity. The stock recently closed at $11.20, down $0.02.

The Dow is at Jan. 2000 levels, but it's still a very different world

It took nearly seven years, but during the trading day on Sept. 28, the Dow Jones industrial average briefly reached a new high of 11,725, surpassing the prior peak close of 11,723 set on Jan. 23, 2000.

Remember those days? That was during the height of the dot-com boom, when the economy was speeding ahead and technology shares were all the rage. My brother-in-law was holding CMGI, hoping for "one more double" and I was begging him to sell half and buy oil stocks instead (if only you'd listened, Bob!). I was very pregnant with my first child -- now a first grader. Time does fly.

Stocks fell for three painful years, first as the dot-com bubble burst, then Sept. 11 terrorist attacks pounded the economy, and finally, as corporate scandals like Enron and Worldcom gripped the nation. The Dow hit a low of 7,286 on Oct. 9, 2002. (a 38% decline from high).

Then, surprise, surprise, 2003 was a boom year for equities. But after that, the charts look kind of flat and bumpy on the road to Dow 11,000. I remember wondering in 2004 and 2005, would we ever get past that level? And this year, could we stay above it? Since August, however, stocks have had a very nice run up to today's close of 11,718.

What is fueling the stock buying now, my colleague Sarah Gilbert asked recently. It's certainly not obvious.

After all, the economy is slowing. The latest reading on gross domestic product came in even lower than thought. Today the Commerce Dept reported 2.6% growth in April-June, when 2.9% growth was reported as a preliminary figure a month ago. Growth in the first quarter was 5.6%.

Continue reading The Dow is at Jan. 2000 levels, but it's still a very different world

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Last updated: November 10, 2009: 06:08 AM

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