DTT Buzz: Does Alexa Forecast Stock Movements?
This is an interesting notion. What relationship does traffic have with stock prices? As Andy shows, with eBay there does seem to be a tight correlation but Amazon the correlation sort of decoupled when the stock tanked but the direction of traffic may have been a leading indicator.
Nice work.
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2 comments:
Didn't Yahoo or Google just settle with advertisers for millions of Dollars regarding click fraud? This reminds me of the 'eyeballs=earnings' stuff I bought and got burned on back in 1999-2000. Tom in Indy
If there is a difference, back then the street was trying to value companies by eyeballs.
I take Andy's post as an exploration as to whether traffic trends have a correlation to price.
A lot of the surviving internet stocks are profitable (they may be very expensive). During the bubble the companies, industry, business models (for those that had business models that is) and the internet itself (mainstream) were all so new and early stage and so far from earnings that the street thought eyeballs was a good way to forecast.
I wrote once before that the hype about the net changing our lives was correct. The big negative was the market ultimately could not accomodate the number of stocks that came public.
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