What To Look For In 2009: The CEO Consensus From The Jefferies Internet Conference


God knows, there’s no shortage of pessimism about the economy and the state of U.S. business these days. But put 70 CEOs in a room together and you’re bound to hear something positive. Here, according to the cluster of CEOs that attended the Jefferies Internet Conference this week, are some of the big opportunities for online companies in 2009. (They were distilled from a report on the conference by Jefferies internet analyst Yousseff Squali.)

More subscription models in 2009 and 2010. As ad dollars dry up in 2009 and perhaps into 2010, digital companies will be forced to find other ways of making money, and some indicated they were already actively pursuing subscription models that generate additional and more stable revenue streams. Netflix said it is likely to roll out a new service that charges customers for online streaming from its catalog, while Shutterfly said it would probably charge customers who use the most storage on its personal-publishing service.
Consolidation is necessary and likely in online video. The consensus was that there are too many online video companies with high-cost business models chasing too few ad dollars. The result? Some industry shrinkage.
Display isn’t going away even though things look awful now. Most executives believed that when the economy recovers, online marketing campaigns will evolve from narrow buys that focus on either search or display to more integrated campaigns across both types of ads. That would give display a lift, though it is unlikely to ever return to its heady growth rates of recent years.
Profit margins will improve. The weak economy has caused even the most optimistic CEO to scrutinize the costs of running his/her business — and most at the conference said that was the silver lining of the recession. Comscore (NSDQ: SCOR), Bankrate (NSDQ: RATE), and Valueclick all expected profit margins to improve over the next couple years.

Keep in mind that these conferences tend to be forums for companies to promote themselves, so it’s not surprising that much of the focus was on what will go right for online businesses and not as much on what is now going wrong.

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