Last year, internet retail sales were up 24 per cent year-over-year and we had our first $100bn-plus year in e-commerce with overall online retail sales at $102bn for 2006. Next year, online advertising is expected to rise from $18bn to $24bn and still be a single-digit percentage of overall advertising, implying there is heavy growth ahead.In the same report, we read that many profitable e-Commerce companies have decided to remain private. (Several examples are given in the report.)
Altucher summarizes his observations this way:
[F]irst, there are many internet companies that are generating enormous profits and revenues and have decided for now to stay private. They will go public eventually. Maybe this year, maybe next, maybe in 2009. Expect about $10bn-$20bn worth (or more) of profitable dotcom companies to go public within the next two years.
Second, because of the value being created, and because none of these companies has yet gone public, expect demand to go up for the shares of the companies that do so. What happens when demand goes up but supply doesn’t increase? Stocks go up.