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Ahead of the Bell: Online Media

By Associated Press
May 23, 2008 | Comments (0)

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A ThinkPanmure analyst said Friday that expectations for online media companies are too high, as conditions will be tough for the rest of the year.

William Morrison said about two-thirds of companies either fell short of analyst estimates or reduced their outlooks in the first quarter, making it one of the worst quarters in years for online media companies. About 75 percent of online media companies would need to increase their revenue to reach expectations, he said _ which is not likely to happen.

Morrison said his top picks in the sector include eHealth Inc. and comScore Inc., which have little exposure to online advertising. He also favors companies including Google Inc., Bankrate Inc. and Marchex Inc. because those companies do not rely much on CPM, a method of payment based on how many times an ad is viewed.

The analyst noted that Google reached estimates for the quarter, but only after analysts reduced their expectations.

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