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            B R E A K F A S T   W I T H   T H E   F O O L
                    Tuesday, December 12, 2000

benjamin.rogers@enron.com
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"The shopping bag ladies -- it's hard to believe, but once they
were children." -- Dean Friedman


DOUBLECLICK'S DOUBLE TAKE
Online advertising powerhouse DoubleClick warns. Figures.

By Rick Aristotle Munarriz

It was simply a matter of when. DoubleClick (Nasdaq: DCLK),
along with fellow online marketers Engage (Nasdaq: ENGA) and
24/7 Media (Nasdaq: TFSM), had already announced layoffs over
the past few weeks. Clearly the once-hot Internet advertising
niche had run ice-cold. Pink slips and economic booms rarely go hand-in-hand.
http://www.fool.com/m.asp?i=239420

So when DoubleClick set up a conference call yesterday after the
market's close, it didn't take much of a guess to know what the
company had to say. It wasn't even a matter of when anymore.
DoubleClick lowered projections for both the December and
January quarters.

Surprised? Not really. It's like pulling up to your house on
your birthday to find a dozen cars parked on your front lawn and
a chorus of hushes as you approach the door.

This surprise party might only startle the Rip Van Winkle who
had last checked DoubleClick's pulse after its September quarter
performance. The company had reported its first profit at the
time and expected similar bottom-line results this quarter. Now
fourth-quarter revenues are expected to come in between $126
million and $129 million -- well off the $140 million previously
projected. Earnings will be breakeven at best.

A wider loss than expected will follow in March. However,
DoubleClick still believes that 2001 will be a profitable year.

Surprised at the long-term stroke of optimism? You shouldn't be.
True, nearly half of DoubleClick's revenues come from dot-com
companies. In many cases, today's clients will line the
corporate obituaries tomorrow as they struggle with cash burn
rates in non-profitable enterprises that the market is no longer
interested in subsidizing. However, one can't deny the lure of
online marketing in the bricks-and-mortar world.

Internet usage is still growing by leaps and bounds. That is
something that can't be said of traditional advertising channels
such as print, television and billboards. The online medium also
provides a more effective way to target an ad recipient.
Probably even more important, in leaner economic times where ad
budgets need to be justified, the success of an Internet
marketing campaign can be effectively measured.

So, sure, these are dark times right now. But for investors
willing to turn the key and step inside, bright lights,
welcoming smiles, and wrapped gifts might be waiting on the
other side.
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NEWS TO GO

Gamblers know to fold 'em when the chips are down. Well,
gamblers, the chips are down. Dallas Semiconductor (NYSE: DS),
Microchip Technology (Nasdaq: MCHP), and Advanced Micro Devices
(NYSE: AMD) reported that quarterly results will come in below
analyst estimates. The chipmakers are blaming a softness in
sales for the shortcoming.

The same can't be said for General Electric (NYSE: GE) and Sonic
(Nasdaq: SONC). Both companies reassured investors that earnings
are on track. GE is comfortable with the year ahead. The
burgermeisters at Sonic are comfortable with first-quarter
estimates despite a slowdown in traffic at the drive-in units.

According to this morning's Washington Post, struggling Internet
service provider PSINet (Nasdaq: PSIX) will be laying off 300
employees. Fittingly pronounced "sigh Net," the struggling
provider has seen its shares crash to under $2 from a high just
above $60 a share back in March. Growing revenues at the expense
of mounting losses just doesn't cut it nowadays.

Take a picture, it'll last longer. For the second time this
quarter, Eastman Kodak (NYSE: EK) has had to reduce profit
forecasts. The photography giant is now expecting full-year
profits to come in lower than the year before. Hoping to shred
the negatives, the company is embarking on a cost-cutting
crusade that will reduce capital spending, SKUs, and inventory
levels. No enlargements.
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