Archive for December, 2010

Which of these will do their IPO in 2011?

By: ispeculatornew | Date posted: 12.31.2010 (5:00 am)

I can’t complain, the sector that I study and spend most time tracking down is the internet stocks sector which has been growing steadily in the past few years. While Amazon, Ebay and Yahoo used to be the big players, there are now plenty of challengers that create more opportunities. You can already take a look at the stocks that I follow and that I consider when doing trades on IntelligentSpeculator. That being said, I’m always very excited about new stocks becoming public. I have been very public about my feelings towards some of these companies but the truth is that many of them would be great investing opportunities.

Here are some of the stocks that could turn public in 2011!

Facebook: I’ve already mentioned Facebook often describing it as the best opportunity out there.  While I hope the company will turn public in 2011, I was the first one to say that I would wait if I were in Mark Zueckberg’s shoes. There are many reasons to go public though and eventually Facebook will move ahead. As a potential investor, my fingers are crossed!

Zynga: Zynga, the gaming company continues to gain steam and while its status is not as “hot” as Facebook’s, it is one of the more likely candidates to go public as it continues to gain market share. The company is estimated to be worth $5 billion and could easily attract enough investors to make the jump

Twitter: The other major social force has been working hard on proving it had a business model and while IPO rumors are much more silent, it could be tempted to raise funds in order to better compete with Facebook. I remain skeptical about Twitter as a stand alone business and think that being purchased by a company like Google could be a great way to better leverage its huge user base. But I might be wrong and Twitter executives probably have a lot of ambition.

LinkedIn: Personally, I do not see LinkedIn going public right now but out of the 3 major social networks, LinkedIn is probably the one that has had the most success in proving its business model and could become a very serious competitor for players such as Monster Worldwide (MWW). I can already see a trade opportunity of Long LinkedIn & Short Monster!!

Groupon: The coupon company was valued at less than $2 billion earlier this year but just refused a $6 billion offer from Google and seems to be gaining new momentum every single day! By refusing the offer, Groupon is probably giving the answer to what most of us were wondering.. is it for sale? No. So then, Groupon will need to raise funds very quickly and going public would be the easiest way of getting that done.

Hulu: The Netflix (NFLX) competitor wannabe has had some success but it certainly looks like the movie and tv studios that are backing it want to get others involved instead of being the only ones putting up the money. I’m not a big believer in Hulu would there is no doubt that having Hulu as a listed company would bring interesting possibilities.

DemandMedia: The content company that I have often compared to Yahoo and AOL has tried to move ahead but seems to have some “questionable” accounting methods which is certainly not very reassuring to potential investors. Because of that, DemandMedia‘s IPO is currently delayed until further notice.

Which ones will turn public in 2011?

Do you have any opinions?:)

My 2010 Tech Stock Trades…the good, the bad & the unexpected

By: ispeculatornew | Date posted: 12.30.2010 (5:00 am)

It has certainly been a volatile year in the stock markets and while our trades are not closed out yet, they will be closed out tomorrow morning and it seemed fitting to go over our trades, what went right, what went wrong and how things will change in 2011. To start things off, the year in numbers:

Number of trades: 25
Winning Trades: 13
Average return by trade: 3.03%
Annualized return: 16.21%

Most Traded name: Apple (AAPL) & Blue Nile (NILE) – 5 times each

Best trade: Long Netflix (NFLX) & Short Blue Nile (NILE) +63,04%
Worst Trade: Long Microsoft (MSFT) & Short Yahoo (YHOO) -27,31%

The Good

-Frequency: I was much more regular this year in posting new trades on every Monday when we had less than 5 live ones

-Overall return: The return over 15% is more than we had last year as is the return per trade 3.03% (vs 2.53%)

-Trading on Apple (AAPL) was very successful: Despite its spectacular growth, I continue to be a long term believer in the stock and have had a lot of success going long on Apple (AAPL).

-Priceline (PCLN) was another huge success story as the stock gained nearly 100% this year. We went long 3 times on Priceline (PCLN) against other travel internet companies and they all turned out to be successful.

The Bad

-Once again, picks in the later part of the year turned out much worse than earlier picks. It’s difficult to pinpoint what is causing this honestly and I will keep looking into it. I am obviously hoping for another strong start in 2011.

-Shorting Yahoo (YHOO) turned out to be difficult: I have been very critical of Yahoo, of its CEO Carol Bartz and of the overall strategy. The stock is also slightly lower than it was one year ago. Why did I do badly on all 3 trades shorting Yahoo? Because I did not short at the right time.

-Trading prior to earnings: At least three times, I ended up trading a feew days before an earnings release and while it did work out once, the other times it didn’t. More importantly, taking a position right before earnings feels more like playing roulette than investing in the market. I will try to avoid trading less than a week before earnings in 2011.

The Unexpected

-Inability to trade Chinese stocks: After having great succes in 2009 with a few Chinese names, especially Baidu (BIDU), I found it much more challenging to do well on the Chinese names because I am missing so much information. One good example is the volatility of CTrip (CTRP) because of its negotiations with a Chinese airline. I will need to find more reliable sources of information for these Chinese names in 2011.

-Google’s (GOOG) drop: I publicly said how much I liked the stock, the company and even its management. Thus, you would not be surprised to hear that I was long Google for much of the year. I could have imagined others performing better but I never would have thought that Google dropping 25% was possible…yet it happened.

Overall

I would say 2010 was a very good year and while finishing with a gain of over 20% would have been ideal, I think the performance was still rock solid. It remained a bit volatile but hopefully my new resolutions will help me diminish the losers…

Top ETF’s in 2010

By: ispeculatornew | Date posted: 12.29.2010 (5:00 am)

The year is quickly coming to an end which gives us an opportunity to look at the best performers in an effort to learn those important lessons that will help us make the right choices in 2011. I decided to take a look at the top performing ETF’s so far this year. As I usually do, I separated the leveraged ETF’s. Why? Because they are created for short term investments so looking at 1 year returns is not as significant.

First off, let’s take a look at the top “unleveraged” ETF’s. A few thoughts:

#1-I’m a bit surprised to see Cotton at the very top since it has not made many headlines

#2-We’ve discussed Silver but it remains surprising to see how little attention it is getting compared to Gold despite its spectacular return in 2010, just a look at the rankings and you will see that #2, #3 and #4 in the rankings are silver ETF’s, all over 70%!!

#3-Commodities remain king! – Some were predicting that commodities might struggle in 2010 because of the struggling economy . The 8 top ETF’s in the US were related to commodities.

#4-Peru? – The top country so far this year has not been Brazil, China or Russia, it has been Peru!! It was able to edge out Thailand at the very top!

Without further wait, here are the top 10 performing ETF’s this year:

[table “204” not found /]

Top 10 performing leveraged ETF’s this year:

[table “205” not found /]

***Please note that these numbers are as of December 24th and
Disclosure: We do not hold any of the discussed ETF’s

If I were Amazon CEO Jeff Bezos for one year…(AMZN)

By: ispeculatornew | Date posted: 12.28.2010 (5:00 am)

With the holidays around the corner, we decided to do a mini series about a few of the tech stocks that we follow all year long. We are the first ones to judge and critic how these companies are run but as they say, it’s always much easier to critic it then actually run a company. So we decided to go ahead and write a series about what we would do with these companies. Hoping you will enjoy the series:

Dec 20    If I were Google CEO Eric Schmidt for one year…
Dec 21    If I were Yahoo CEO Carol Bartz for one year…
Dec 22    If I were AOL CEO Tim Armstrong for one year…
Dec 23    If I were Facebook founder Mark Zuckerberg for one year…
Dec 24    If I were Apple CEO Steve Jobs for one year…
Dec 27    If I were Ebay CEO John Donahoe for one year…
Dec 28    If I were Amazon CEO … for one year…

Management in the past few years

It’s difficult to criticize Amazon which has gone from a niche ecommerce website to what I would consider to be the top one on the internet. Not only does it lead in terms of sales but the overall technology, customer service and operational processes are the key behind what has become an almost flawless experience. Just think about the sheer volume that Amazon is able to produce and compare that to the number of horror stories that you’ve heard from past buyers.

One area where I have been very critical of Amazon is the Kindle. Launching an ebook reader that can do so little compared to competitors was certainly a risky strategy and remains so but it has been good to a certain extent. The main point I guess is that Amazon needed an entry point to the ebook market and while the Kindle is not perfect, it has proved a good and cheap alternative which helps Amazon remain a player.

On the growth front, Amazon has not been aggressive as many would have liked but the purchase of Zappos was a great move and I’m glad to see that Zappos has been able to remain fairly independent as it continues its growth strategy.

General Vision

-Remain the market leader in the ecommerce space while expanding the product offering

Initiatives/Priorities I would get started on

Acquire GoDaddy : For about $1.1 billion, Amazon could acquire GoDaddy which would be a great step forward for its digital strategy. Amazon is one of the leaders in terms of hosting data already and acquiring another strong brand could be a great move. It would also give tremendous access to millions of customers.

Grocery Service: Amazon needs to slowly integrate more products into its services and adding grocery stores would sound like a great idea. Amazon has an amazing service and that could easily be used to sell more products. Food wholesale selling through the internet could bring significant economies. I think it would be important to start in a few different cities at first obviously as this service is not as easy to scale up. The company has already been playing with this concept in Britain but I remain convinced that it can work

Help Zappos expand: Zappos has been a true success story and it has been expanding in a sector that Amazon might not have as much success in; clothes and shoes. I think Zappos needs to be helped. How can the company expand both in terms of the range it offers and the markets it is serving without compromising its valued customer service? Amazon surely can make that happen.

Integrate Social into Amazon: When a customer buys a product, why not give them more motivation to share their experience both by doing a review but even more importantly with their friends through Twitter & Facebook. It could be done by giving them incentives (commissions) on sales generated by their friends. Another way to do it would be for visitors to see which of their friends purchased a specific item when they are browsing Amazon (for those who accept to be included of course).

Expand the work on Android & Iphone/Ipad apps: I have been truly impressed by Amazon’s progress in getting its Apps at the top of the Ituens and Android app stores. I think Amazon needs to be proactive to make the user experience as easy and enjoyable as possible.

Any thoughts or ideas?

I would love to hear your thoughts or ideas regarding all of these initiatives!

Disclosure: I do not hold a position on Amazon (AMZN)

If I were Ebay CEO John Donahoe for one year… (EBAY)

By: ispeculatornew | Date posted: 12.27.2010 (5:00 am)

With the holidays around the corner, we decided to do a mini series about a few of the tech stocks that we follow all year long. We are the first ones to judge and critic how these companies are run but as they say, it’s always much easier to critic it then actually run a company. So we decided to go ahead and write a series about what we would do with these companies. Hoping you will enjoy the series:

Dec 20    If I were Google CEO Eric Schmidt for one year…
Dec 21    If I were Yahoo CEO Carol Bartz for one year…
Dec 22    If I were AOL CEO Tim Armstrong for one year…
Dec 23    If I were Facebook founder Mark Zuckerberg for one year…
Dec 24    If I were Apple CEO Steve Jobs for one year…
Dec 27    If I were Ebay CEO John Donahoe for one year…
Dec 28    If I were Amazon CEO … for one year…

Management in the past few years

Since the arrival of John Donahoe, I think Ebay’s general direction has much better than in past years. One of the key challenges for Ebay is that it aims to be at the center of ecommerce but it’s not quite clear where that center is. The sales are booming but it is also changing very fast. A few years ago, auctions were the driving way to buy goods online but that evolved towards listings. Through Ebay and investments in Kijjiji and Craigslist, Ebay has generally been well position for all of these trends. It is now working very hard to be well positioned in the booming mobile segment.

The one thing that has impressed me most about John Donahoe however is that Paypal seems to finally be getting the attention that it deserves inside Ebay. You might say he has no choice to do so after its continued growth. In fact, I’ve been very public about the fact that I’ve been valuing Ebay as a bank rather than as the ecommerce company that it once was exclusively.

General Vision

-Be at center of online transactions for both e-commerce and services alike through innovative and customer friendly services

Initiatives/Priorities I would get started on

B2B : Business to Business is a growing part of what is happening on the internet and it’s fair to say that it will be a big part of the future. Ebay needs to take a central role in those transactions and one great way to do that would be buying Alibaba from Yahoo. Alibaba is a leading B2B player and is quickly expanding beyond its Chinese origins.

Craigslist: Ebay is part owner and in my opinion it’s time to complete the acquisition. Craigslist has proved it was a player for the long term and Ebay’s power could certainly help it keep that place. For profitability purposes, I would slowly start integrating more “premium listings”. Like Google’s adwords however, these listings would be clicks based and only appear when they prove relevant to users.

Coupons: Internet ecommerce used to be mainly done through auctions and then moved to classified websites such as Craigslist. That is now moving to a new center as coupon websites such as Groupon are gaining a lot of traction and websites. Ebay needs to get involved here as quickly as possible. It would be a good fit to buy Groupon although the leading coupon player is quickly becoming a very expensive buy. Otherwise, smaller players like Coupons.com might still be possible to get. Ebay must act quickly before it gets too light.

Change its mentality: Ebay, Craigslist, Stubhub, etc. These are all niche players that answer to a specific consumer need. I think it’s important for Ebay to be more proactive in these markets. For example, when coupons started being a trend over a year ago, Ebay should have acted then. It would have been much cheaper one year ago to make a major acquisition or start a product of its own. But as Ebay takes time to answer, it becomes much more expensive to get into the game.

Develop a ticketmaster alternative: Ticketmaster is a dominant player in the ticket industry and has been charging very high fees because of its dominance. Recently, it has even started competing with Ebay in the resell of tickets. I think Ebay is one of the companies that could develop a solid Ticketmaster competition. It is about creating a robust, flexible and innovative solution that helps merchants maximize their revenues while diminishing the fees to event holders. Because of the low competition, the margins available right now are very high.

Use Paypal as a hub to offer expanded loans, credit cards: Paypal has made it easy for consumers to exchange money between their Paypal account and their Ebay account. It could slowly start offering more financial products to these users starting with credit.

Diminish fees charges to Paypal users: Being profitable is important but remaining the leading player for ecommerce transactions is even more so and one of the only complaints about Paypal are the high fees. I think that Paypal should aim to slowly diminish these fees in order to make it much more difficult for competitors to enter the market. Instead, focus on offering expanded services to make up and even increase revenues per user.

Any thoughts or ideas?

I would love to hear your thoughts or ideas regarding all of these initiatives!

Disclosure: I am long Ebay (EBAY)

Merry Christmas

By: ispeculatornew | Date posted: 12.25.2010 (5:00 am)

Best wishes to all of you, may these holidays be filled with joy, love and family time

If I were Apple CEO Steve Jobs for one year… (AAPL)

By: ispeculatornew | Date posted: 12.24.2010 (5:00 am)

With the holidays around the corner, we decided to do a mini series about a few of the tech stocks that we follow all year long. We are the first ones to judge and critic how these companies are run but as they say, it’s always much easier to critic it then actually run a company. So we decided to go ahead and write a series about what we would do with these companies. Hoping you will enjoy the series:

Dec 20    If I were Google CEO Eric Schmidt for one year…
Dec 21    If I were Yahoo CEO Carol Bartz for one year…
Dec 22    If I were AOL CEO Tim Armstrong for one year…
Dec 23    If I were Facebook founder Mark Zuckerberg for one year…
Dec 24    If I were Apple CEO Steve Jobs for one year…
Dec 27    If I were Ebay CEO John Donahoe for one year…
Dec 28    If I were Amazon CEO … for one year…

Management in the past few years

Taking over Apple would be a very big challenge. No CEO is seen as more instrumental to his company’s success than Steve Jobs is to Apple. Since his return to the company, Steve Jobs has led countless product launches that have helped Apple take over what seemed unthinkable just 5 years ago, the top technology company in the world in terms of market cap. Apple is dominant in all kinds of products from the Ipod to the Ipad but it’s future now seems tied to the Iphone as Apple battles both Research in Motion (RIMM) and Google (GOOG). As mobile devices gain importance, being the dominant player has allowed Apple to be a major force to be reckoned with.

General Vision

-Make Apple products the leading edge in terms of design, technology and overall experience.

Initiatives/Priorities I would get started on

Offer the Iphone & Ipad on other carriers : As good as Steve Jobs has been about delivering a solid product, this is a MAJOR flaw that needs to be fixed quickly. I would be curious to know what kind of market share Android would have had the Iphone been available on other carriers from the start. Google might need to give up some of its control but right now, having it only on AT&T, a carrier that is very unpopular seems like a big mistake. From my first day in, getting it on Verizon and at least one or two others would be my top priority. This would give me access to more users and also hurt Android powered handsets.

Buy Netflix: Some rumors were discussed a few weeks ago and I even wrote about it.  Buying Netflix is certainly a bit of a gamble because of its high valuation but it makes sense in so many ways for Apple. First off, one of the battles that Apple has been waging for its Ipod/Ipad/Iphone line in Itunes has been buying content. Netflix has an incredible number of deals for content which could instantly help Apple. Another priority for Apple has been gaining access to the living room through Apple TV. What better way to do that than get access to the #1 movie/tv streaming and rental service? It makes sense in many ways.

Live Satellite radio & tv: Sirius might not be for everyone but I’m convinced that adding it to the Iphone would be a major improvement for many users. Apple could get a cut of the profits and revenues generated by Apple users and Sirius would instantly get access to millions of new users. A win win for everyone involved in my opinion. I’m shocked this has not happened already. To be fair, users can get Sirius radio through an App but I think a deeper alliance between the two companies (such as pre-installing Sirius on all devices with a trial period) would make a lot more sense.

Create a messaging system: This could be used by all Apple device users, would be a “chat system” that could also support sending files such as photos & videos but also include video chat and other features.

Payment systems: Apple is big enough to become a “standard”. Many countries now have a lot of transactions go through their phones and Apple should lead such an initiative in the US.

Flash Support: I understand that the reason why flash is not supported is because its a challenge to not crash devices and keep the user experience solid. But making enemies is not a good idea, take your ego out of the way. Also, apart from the carriers issue, lack of Flash support is the big reason why users are not buying an Iphone. There’s no sense in doing it. Instead, work with Adobe to make it more stable and let users know when Flash creates issues/crashes on their device.

Any thoughts or ideas?

I would love to hear your thoughts or ideas regarding all of these initiatives!

Disclosure: I am long Apple (AAPL)

If I were Facebook CEO Mark Zuckerberg for one year…

By: ispeculatornew | Date posted: 12.23.2010 (5:00 am)

With the holidays around the corner, we decided to do a mini series about a few of the tech stocks that we follow all year long. We are the first ones to judge and critic how these companies are run but as they say, it’s always much easier to critic it then actually run a company. So we decided to go ahead and write a series about what we would do with these companies. Hoping you will enjoy the series:

Dec 20    If I were Google CEO Eric Schmidt for one year…
Dec 21    If I were Yahoo CEO Carol Bartz for one year…
Dec 22    If I were AOL CEO Tim Armstrong for one year…
Dec 23    If I were Facebook founder Mark Zuckerberg for one year…
Dec 24    If I were Apple CEO Steve Jobs for one year…
Dec 27    If I were Ebay CEO John Donahoe for one year…
Dec 28    If I were Amazon CEO … for one year…

Management in the past few years

It’s no secret on this blog, I am a big fan of Facebook. Yes of the website.. But more so of the company, how it is being run, and even its current valuation. Some consider it outrageous to see a company with fairly small revenues now trading at a $50 billion valuation. I consider it a major bargain. I’ve said that Facebook is currently the best buying opportunity in the market and still believe it although it’s not easy to get actual exposure to the company since Facebook is not listed yet.
So yes, I consider Facebook to be very well run at the moment, mostly because of these reasons:

-Focused on user experience: While companies like MySpace made critical errors by focusing on revenues too early, Facebook’s attitude towards its product and its business has been nothing short of extraordinary as it tries to build the “new internet

-Mark Zuckerberg: He’s not perfect, far from it, but as I wrote about recently, he remains focused on taking his company to the next level rather than cashing out

-Talent: In a world where talent is a very rare resource, Facebook’s innovation and focus on improvement have been key in attracting talent

There is no doubt in my opinion that Facebook is one of the best run companies in the tech space which will make it a bigger challenge to assume the CEO position!

General Vision

-Make the web a more social and friendly place

Initiatives/Priorities I would get started on

Twitter : Facebook’s only credible competition comes from Twitter which is the 2nd social player on the internet. Twitter is huge because it fills needs that Facebook is not currently filling. I think that by separating status updates (similar to Twitter functions) from everything else, the need and usefullness of Twitter would be greatly diminished. It would then become importantto offer mobile apps that have one basic function: “Status Update Screens”. Finally, give the possibility to add someone either as a “friend” or simply follow their status updates. The strategy could be tweeked over time but I think it would bring some of Twitter’s flow back to Facebook without hurting Facebook’s nature.

Privacy Policy: One of the only problems with Facebook or issues that have complicated life for Facebook is privacy. I would make the policy very transparent about the non-sharing of private information. By default, users would only be sharing their photos and information with friends although they can change that. Also, I would segregate information so that users that use applications would only give out the information that they want to give out to those applications. It is critical for users to trust Facebook.

Security: Facebook needs to do everything in its power to ensure the security of the users information. A breach similar to what Gawker is going through would be a major blow for the rest of the big plan. I would thus hire security experts and challengethese firms to get around the security setup giving out rewards if they can. Security needs to be the top priority. Users could even get authentication software if they use Facebook credits (see below).

Facebook credits: Thanks to Facebook connect, users are getting increasingly comfortable with using one login around the web. That should be expanded. Users could make purchases to major websites by simply logging in and clicking buy. Entering the address and billing info would be a thing of the past as Facebook would be processing the transaction. That means minimal risk because only Facebook would have access to the credit card information. It would then send the money (after fees of course) to the merchant as well as shipping information. A 1 click buy on almost any website.

Display advertising: Facebook has more eyeballs than anyone else on the internet and I think it’s quickly becoming the best place for brands to advertise themselves. There are many different ways to do it but I think there are ways to do it that will please both users and advertisers such as special offers. I would work closely with advertising agencies to find the best ways to get these big companies to start using Facebook as one of their main advertising mediums.

Create Locak Yellow Pages (with charged listings and comments): Facebook knows where you live. So the next time you are looking for a dentist, wouldn’t it be convenient to simply take a look at the listings and see which one your friends are using? Listing would be free and users could give out comments, ratings or anything else. The money would come from special promotions that merchants could run or when they pay money to get additional visibility.

Social Search  (friends, etc): Facebook is already making inroads with search thanks to its “Like” button. I think the company could expand greatly the concept in order to help us share content that we like more easily. Storing information and displaying it in an optimized way would make searching the web a much easier experience.

Delay IPO: As much as investors like myself are excited about a future IPO, I would delay it as much as possible. I had written about the subject and basically I believe that Facebook as a private company is keeping its eyes on the long term which is critical.

Any thoughts or ideas?

I would love to hear your thoughts or ideas regarding all of these initiatives!

Quick news – December 22 2010

By: ispeculatornew | Date posted: 12.23.2010 (4:08 am)

Tech news: (concern the stocks we follow)

Priceline (PCLN) was raised to Buy by ThinkEquity with a $530 price target

Best return:    CTrip (CTRP) +3,05%


Worst return:   Blue Nile (NILE) -2,63%

If I were AOL CEO Tim Armstrong for one year… (AOL)

By: ispeculatornew | Date posted: 12.22.2010 (5:00 am)

With the holidays around the corner, we decided to do a mini series about a few of the tech stocks that we follow all year long. We are the first ones to judge and critic how these companies are run but as they say, it’s always much easier to critic it then actually run a company. So we decided to go ahead and write a series about what we would do with these companies. Hoping you will enjoy the series:

Dec 20    If I were Google CEO Eric Schmidt for one year…
Dec 21    If I were Yahoo CEO Carol Bartz for one year…
Dec 23    If I were Facebook founder Mark Zuckerberg for one year…
Dec 24    If I were Apple CEO Steve Jobs for one year…
Dec 27    If I were Ebay CEO John Donahoe for one year…
Dec 28    If I were Amazon CEO … for one year…

Management in the past few years

AOL used to be a dog in my opinion and even as recently as a few months ago, I would include AOL and Yahoo in the same sentence as IAC Interactive as the worst managed web companies out there. Tim Armstrong’s arrival as CEO has certainly started to change my mind on AOL’s future and it’s much clearer to me where AOL is now headed and the focus has certainly been one of the big reasons why I will probably be going long on AOL in the near future. Acquisitions like TechCrunch, one of the most valuable blogs, are reasons why I believe that AOL is headed in the right direction. It remains a challenging business and a fairly complex one but I do have faith in Tim Armstrong’s leadership.

AOL is a very decentralized company so judging it on the traffic at AOL.com would be very misleading. One of the most promising areas for AOL is Patch.com, its network of local websites which has been growing like crazy and could become the leading effort for AOL in the battle for local traffic. Just take a look at this stunning traffic chart:

General Vision

AOL should be the leader in hyper targeted and hyper local websites with a twofold focus: High quality content and a leader in online Advertising.

Initiatives/Priorities I would get started on in terms of content

Keep Patch in high growth mode: Patch.com is growing amazingly quickly and I personally still have some questions about the cost structure, I think AOL is doing the right thing in keeping the roll out pace frantic. AOL needs to take over the market before others like Yahoo can react and figure out the revenues and costs later on.  The structure and strategy looks sound so far

Start developing premium content on key properties: Some properties could be structured in a way to give users extra content for a monthly fee that could add to AOL’s recurring revenues.

Add a Sports Network: AOL does have some sports properties such as FanHouse but I think it could eventually take much more of a leader role and compete with ESPN.com. It will be a long term project but I think AOL has everything required in order to make it work.

Buy Yelp ($265M): Yelp information, sales force and user base could easily be integrated with Patch in order to consolidate itself as the top local network.

Buy EveryDayHealth ($460M): It is one of the leading “health” blogs and seems to fit perfectly within AOL’s strategy

Buy Sugar Inc ($250M): AOL  continues to have a lot of cash to spend and I would concentrate on getting more high quality content in order to optimize the advertising efforts & technology. Sugar Inc is a leading network and would fit very well within AOL’s strategy.

Buy the Huffington Post or NY Times: These are both very difficult and expensive acquisitions but if it makes sense for one company to buy them, AOL is the one in my opinion. It would be able to leverage its technology and advertising sales force to optimize the return on both investments. The NY Times would be a very intriguing combination and would certainly result in a very much improved web strategy for the legendary newspaper.

Initiatives/Priorities I would get started on in terms of advertising

I think the key point for AOL would be to quickly get access to better advertising technology and a superior sales force in order to offer the best solutions for online advertisers. I think AOL is well positioned to compete with Google, Microsoft and Yahoo for the big names such as Coca-Cola and GM.

Acquiring Tremor Media, Valueclick and Quinstreet would give AOL an edge in order to best profit from its network of properties in an optimal way.

Any thoughts or ideas?

I would love to hear your thoughts or ideas regarding all of these initiatives!

Disclaimer: I am currently short AOL