So thinks Piper Jaffray analyst Safa Rashtchy…The three recent acquisitions by Yahoo, Ask Jeeves and Infospace represent a new wave of consolidation that we believe will continue and accelerate through 2004 and 2005.
Rashtchy outlines five factors why he thinks so: the market fundamentals, especially in advertising, are very solid; market is becoming very competitive and “land grab” is once again the appropriate strategy for growth; a higher percentage of reach almost guarantees a higher percentage of revenues; and the competitive pressure that Google has created for nearly everyone in the industry.
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