• by February 16, 2001

Well, it's about time. According to stock analyst Henry Blodget, online advertising picked up slightly this month over January and AOL Time Warner and Yahoo are among the companies expected to benefit from a stabilizing online advertising market.

"Conversations with online media buyers and companies suggest that although overall demand is still soft, pricing has stabilized at the leading sites, which we regard as encouraging," Blodget said in his regular report.

Blodget said that even though companies from Yahoo to CMGI recently projected a slowdown in ad revenue for the year and saw their stocks sink, giants like AOL Time Warner may defy the industry trend and post an ad revenue increase in the Q1 2001 compared with Q4 2000.

I know we don't normally talk about stock prices in this newsletter, but interestingly enough, Blodget added that DoubleClick and GoTo.com may also warrant a look by risk- tolerant investors.

"We...continue to believe that the (first quarter) weakness is already in the stocks and that the environment will get better, not worse, throughout the year," Blodget said. "We therefore believe that this is a good time for risk-tolerant investors to look at a few select online media names."

To keep things in perspective, although Blodget believes the online advertising market will be flat this year over the previous year, he noted he may cut his projection if the economy fails to recover in the second half of the year.