Internet Segment: All Ready To Go

Cisco Systems Inc: Acquisitions

Momentum



Cisco Systems, which was founded by a group of scientists from Stanford
University in 1984, develops Internet Protocol (IP) based networking

technologies for data, voice, and video-for local and wide area networks for

global markets. Cisco Systems declared promising results for the first quarter

of '07, ended Oct 2006. Net sales of $8.2 bn, an increase of 26.15% from $6.5

bn in the same quarter the previous year, and net profit of $1.6 bn compared to

$1.3 bn in the same quarter the previous year-a growth of 23.1% y-o-y.

During the quarter, Cisco completed the acquisitions of Arroyo

Video Solutions and Meetinghouse Data Communications. It entered into an

agreement to acquire the privately held company, IronPort Systems of San Bruno,

Calif, a provider of messaging security appliances. It also entered into an

agreement to acquire the privately held company, Tivella of Half Moon Bay,

California, a leading provider of digital signage software and systems. Cisco

also acquired Greenfield Networks of Sunnyvale, California, a provider of

integrated circuits, hardware and software optimized for Ethernet. Cisco's

shares currently trade at $28.47.

Ebay Inc: Strong Growth



Founded in 1995, eBay provides online marketplaces for the sale of goods and
services, online payments services, and online communication offerings to a

diverse community of individuals and businesses. eBay has three primary

businesses: the eBay Marketplaces, Payments, and Communications.

eBay reported encouraging results for the third quarter ended

September 30, 2006. Revenues touched $1,449 mn showing a growth rate of 31%

y-o-y as compared to $1,105 mn in the same period last year. Net profits was

$281 mn, an increase of 10% y-o-y as compared to $ 255 mn in the same period

last year. The number of user base in the third quarter totaled 212 mn,

representing a 26% increase over the 168 mn users reported in the same period

last year. For the fourth quarter, eBay expects revenue to be in the range of

$1,615 mn to $1,675 mn.

During the quarter eBay entered into a joint venture with TOM

online, an online portal and wireless Internet company. This agreement will

enable growth of e-commerce and m-commerce in the rapidly growing Chinese

market. eBay has 49% stake in the joint venture, and TOM Online has 51% stake,

including a $40 mn cash contribution from eBay and $20 mn in financing from TOM

online. It also entered into a multi-year agreement with Google to connect

users, advertisers and merchants. eBay shares change hands at $30.78.

Yahoo Inc: Not a Great Quarter



Yahoo!, a global Internet brand and Internet destination, offers a full
range of tools and marketing solutions for businesses to connect with Internet

users around the world. Yahoo! is headquartered in Sunnyvale, California. It

generates revenue by providing marketing services to businesses across the

majority of its properties and by establishing paying relationships with users

for premium services. Yahoo! offers services to users and businesses in four

categories: search, marketplace, information and entertainment, and

communications and connected life. The majority of its offerings are available

in 15 languages.

Yahoo! reported a relatively weak quarter for the quarter ended

September 30, 2006. Revenues stood at $1,580 mn, a 19% increase over $1,330 mn

achieved in the same period last year. Net profits stood at $159 mn compared to

$254 mn a year ago. Revenues from the US stood at $1,054 mn, a 14% increase

compared to $923 mn for the same period last year. International revenues stood

at $526 mn, a 29% increase compared to $407 mn for the same period last year.

For the year ending, Yahoo! expects revenues to be in the range of $4,477 mn to

$4,597 mn.

During the quarter, Yahoo! entered into a strategic partnership

with more than 150 daily US newspapers to deliver search, graphical and

classified advertising to consumers. With recruitment advertising, the

newspapers and Yahoo! HotJobs are bringing online audiences, targeting

capabilities, local expertise and advertising power to recruiters. Yahoo! shares

change hands at $27.74

Google: Strength to Strength



Google reported revenues of $2.69 bn for the quarter ended September 30, 2006, a
70% increase y-o-y with revenues at $ 1.58 bn and a 10% increase on a q-o-q

basis with revenues at $2.46 bn. Google-owned sites generated revenues of $1.63

bn, or 60% of total revenues. Google's partner sites generated revenues,

through AdSense programs, of $1.04 bn, or 39% of total revenues, in the third

quarter of 2006.  Revenues from outside of the US contributed 44% of total

revenues in the third quarter of 2006. Net profits for the third quarter of 2006

was $733 mn as compared to $721 mn in the second quarter.

Google acquired YouTube, the consumer media company for people

to watch and share original videos, for $1.65 bn in a stock-for-stock operation.

In connection with the acquisition, Google issued an aggregate of 3,217,560

shares, and restricted stock units, options and a warrant exercisable for or

convertible into an aggregate of 442,210 shares. Google also entered into a

strategic alliance with Intuit, a provider of business and financial management

solutions for small and mid-sized businesses, consumers and accounting

professionals. Google also signed a multi-year agreement with eBay to connect

users, advertisers, and merchants around the globe. Google will become the text

based advertising provider for eBay outside the US. Google shares are traded at

$487.19.

Amazon: Sales Grow, Profits Decline



Amazon.com, founded in 1994, reported a growth in profits for the quarter ended
September 30, 2006. While net sales increased 24% to $2,307 mn, compared with

$1,858 mn in the same period last year, net profits were $19 mn compared with

net profits of $30 mn in the same period last year, a decrease of 36.67%. For

the fourth quarter, net sales are expected to be between $3.625 bn and $3.950 bn.

During the quarter, Amazon.com launched Amazon Unbox, a new

digital video download service offering customers thousands of television shows,

movies and other video content from global partner studios and networks. Amazon

Business Solutions launched Fulfillment by Amazon and WebStore by Amazon, giving

small and medium sized businesses access to Amazon's order fulfillment,

customer service, customer shipping offers, and underlying website technology to

improve the experience they can offer their customers. Amazon shares are traded

at $38.37.