So you think you had a bad weekend? According to police reports, on Sunday in St. Augustine, Fla., a woman in an SUV allegedly ran over two teenagers who accidentally bounced a golf ball off her vehicle in a mall parking lot. One of the teens suffered life-threatening injuries. When she was finished, the woman allegedly got out of her car and smoked a cigarette. We're not making this up.

Stocks fell into red across the board today. It's a mad, mad, mad, mad world.

In today's Motley Fool Take:

FindWhat.com: A Year Later

By

Rick Aristotle Munarriz (TMF Edible)



One of the many reasons that our new Stocks 2005 publication has been drawing investor interest is that all 11 picks of Stocks 2004 have produced positive returns over the past year. In fact, all but two actually beat the market.

My contribution last year was paid search specialist FindWhat.com(Nasdaq: FWHT). It seemed like a capable stock pick at the time. The stock was trading at just $13.99 and with Yahoo!(Nasdaq: YHOO) relying so strongly on its Overture acquisition to drive profits and Google(Nasdaq: GOOG) set to go public, paid search was just begging to get noticed.

FindWhat was lurking in the shadows but I wouldn't have necessarily classified it as all that speculative. In fact, the company had produced a profit every quarter since the summer of 2001. It was also in the process of making some savvy acquisitions before the market's desire to ride Google's coattails would have driven up the asking prices on its purchases.

The pick paid off. Yesterday the shares closed at $19.60, 40% higher than when the stock was singled out in Stocks 2004. The company's fundamentals have earned the attention. Earlier this year FindWhat.com was looking to earn $0.60 a share in 2004 on $95 million in revenue.

While the company's corporate buys now find the top line angling toward a padded $170 million in revenue, prospects for the bottom line have also improved. FindWhat expects to earn between $0.60 and $0.63 a share this year. If you back out the amortization expenses of its acquisitions, those sums clock in a dime per share higher.

It's not just Google and Yahoo! cashing in on the booming paid search market. From InfoSpace(Nasdaq: INSP) to Ask Jeeves(Nasdaq: ASKJ) to LookSmart(Nasdaq: LOOK), there are many active companies selling effective contextual text ad space to a growing field of willing sponsors.

While I have chosen a much larger company for the new Stocks 2005 collection, it too is a company whose proven assets and earnings potential I believe have been vastly underestimated by the market. How will it this one fare? Let's talk again next year.

Longtime Fool contributor Rick Munarriz has been a vocal fan of the paid search providers, but he does not own shares in any of the companies mentioned in this story. He is a member of the Rule Breakers analytical team, seeking out tomorrow's great growth stocks today.

Discussion Board of the Day: On Tilt

Are you a Vegas junkie? Do you find yourself shouting at your television during the World Poker Tour? How do you feel about casinos tracking you? All this and more -- in the On Tilt discussion board. Only on Fool.com.

Amazon Blacks Out

By

Tim Beyers

Get out the diapers. Online shopping has grown like a weed in recent years. But on Monday, when its site went missing for several hours, Motley Fool Stock Advisor recommendation Amazon.com(Nasdaq: AMZN) gave us a startling reminder that the key players, like bladder-busting toddlers, are still prone to the occasional accident.

In a report at ZDNet, Web performance monitor Keynote Systems said the e-commerce giant started experiencing problems yesterday morning at 8 a.m. Pacific time and that outages continued intermittently through 2:30 p.m. Pacific. It wasn't clear whether the site was the target of a deliberate attack or the victim of an internal glitch. Either way, the timing stinks.

Amazon blacked out after online retailers had a banner Black Friday. The day after Thanksgiving -- known for its ability to put retailers "in the black" -- was a huge success as online shoppers booked more than $250 million in sales, up 41% from last year, according to researcher comScore Media Metrix. Shoppers even got out on turkey day, stuffing virtual shopping carts with $133 million in goods. That's double last year's total.

The good news is that last month's shopping could account for only 17% of expected online retail sales this season, according to a research report compiled by Goldman Sachs(NYSE: GS), Nielsen/NetRatings, and pollster Harris Interactive(Nasdaq: HPOL). No doubt Amazon would get much of the remaining business, so long as its virtual doors remain open. It's worth noting that the company is expecting a windfall: Fourth-quarter guidance calls for revenue of $2.29 billion to $2.54 billion, or growth of as much as 31% over last year.

Will it now be harder for Amazon to make its numbers? Probably. But investors shouldn't overreact the way Wall Streeters did when Wal-Mart's(NYSE: WMT) Thanksgiving hiccup came to light. If anything, Foolish stock pickers ought to be looking to profit if smaller online retailers such as Motley Fool Rule Breakers recommendation Overstock.com(Nasdaq: OSTK) or Motley Fool Hidden Gems pick RedEnvelope(Nasdaq: REDE) see their shares spark and sputter on Amazon's blackout.

For related Foolishness:

Fool contributor Tim Beyers has never blacked out, though he did live through New York's famous 1977 blackout. Tim doesn't own stock in any of the companies mentioned. To get a peek at his weird habits and portfolio, check out his Fool profile, which is here.

Quote of Note

"Courage is the price that life exacts for granting peace." -- Amelia Earhart

A Sad Day for Colgate

By

W.D. Crotty

December 7, 1941, will always be remembered as "a date which will live in infamy." (That was Pearl Harbor, for those who slept through history class.) For Colgate-Palmolive(NYSE: CL) employees and shareholders, December 7, 2004, will be remembered as the day the restructuring ax fell.

Today, the consumer products company announced a four-year restructuring and business-building plan in which 4,440 jobs (12% of the workforce) will be cut and one-third of its factories will be closed. The restructuring will cost up to $650 million after taxes, and the projected after-tax annual savings will be up to $300 million by the fourth year.

The goal is to grow earnings at low double-digit rates in 2006 and beyond.

The company touts "current excellent worldwide sales and unit volume trends" but stops short of noting that it also said in October that "the combined effect of increased commercial spending and increase in raw and packing material costs" led to a 10% decrease in net income. So, how firm is that 2006 projection?

To be fair, Colgate's "Funding the Growth" savings programs had led to record gross margins -- margins that even exceed those at competitor Procter & Gamble(NYSE: PG) -- but which, at 55.3%, are still dwarfed by the 60.6% margins at Gillette(NYSE: G). The company reaffirmed 2005 guidance for 6% to 10% earnings growth.

Investors reading through the company-provided statistics in the latest earnings report will find that the after-tax return on capital decreased from 37.1% to 32.9% and that net debt increased from $3.0 billion to $3.3 billion. Those are trends that bear watching -- restructuring or not.

The stock is up 6% on today's news. But, with the stock trading at 20 times consensus earnings, it is hardly cheap. The stock is also down almost 11% from where it was 52 weeks ago and has gone nowhere but sideways in the last five years.

Restructuring will certainly help control costs, but won't provide an indication if Colgate will have the marketing and products to drive earnings -- and that's the other big half of the equation.

For related Fool analysis, see:

Fool contributor W.D. Crotty does not own stock in any of the companies mentioned.

Profiting From Questions

By

Tim Beyers

Those who've been reading my ramblings here at Fool.com for any amount of time know that I'm an investor in Akamai Technologies(Nasdaq: AKAM). I consider the company a Rule Breaker. (You can read why here if you have a subscription to Motley Fool Rule Breakers.)

Yesterday, Akamai, which specializes in speeding the delivery of content and software over the Web, announced that it had finally settled a long-standing legal dispute with former rival Digital Island, now bankrupt and known as Cable & Wireless Internet Services. The fight dates back to December 2001, when a patent lawsuit was decided in Akamai's favor, though three provisions of the patent were, at the time, determined invalid. Recently, however, a Federal District Court overturned that ruling and upheld all provisions of the patent.

Still, both victories had been more symbolic than anything else, as damages weren't agreed upon -- that is, until yesterday. Even then, investors were left wondering by the press release, which said squat about how much Akamai expects to receive. Judging from their buying today -- Akamai's stock is trading more than 3% higher as of this writing -- investors appear to think it's a material windfall. (Oops.)

Actually, it's not all that much. In an interview yesterday, Akamai spokespeople revealed that the deal is technically worth $4.5 million, but that with bankruptcy proceedings at Cable & Wireless Internet Services, the company expects to yield no more than $1.2 million in cash payments spread out over time. Even had that sum been paid in full last quarter it would have added only a penny per share in earnings.

The lesson here is simple: Don't assume. As an owner, you have the right -- nay, the obligation -- to ask questions of the management of your company. That's all I did. And now I know a little more about a firm I'm counting on to help meet my long-term financial goals. There's a word for that, folks: Foolish.

For related Foolishness:

Fool contributor Tim Beyers owns shares of Akamai and Oracle. You can view his Fool profile and other stock holdings here.

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