Tech Bubble Back?

This is a partial transcript from "Your World with Neil Cavuto", January 28, 2004, that was edited for clarity.

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NEIL CAVUTO, HOST: Well, who says the tech (search) bubble of the late 1990s is over? Well, not my next guest, just looking at his stock. His own online business more than doubled Forbes’ fourth quarter earnings. The surge was driven by improved business conditions and that its customers are simply getting back into the market in a big way.

Joining us now from San Francisco is Larry Kramer. Larry is MarketWatch’s chairman and CEO.

Larry, good to have you. Congratulations.

LARRY KRAMER, MARKETWATCH.COM FOUNDER (MKTW): Thanks, Neil. How are you?

CAVUTO: I’m fine, sir. And apparently, so, too, your business. What is going on here?

KRAMER: Well, advertising has come back in a big way. That’s really helped. The last two quarters that has been true.

We are seeing it across the board in all of our categories, too, and in all of our media. We’re mostly Web, but we have TV an radio operations as well.

CAVUTO: All right. Is any of this driven by -- I wouldn’t call it frenetic, but more picked-up pace, shall we say, of market enthusiasts?

KRAMER: Yes, I think so. I think in some areas like tech, we are seeing substantially increased spending. And in the financial services space we are seeing a lot more spending on the part of the brokers, who apparently believe it is time to go out and get those customers again.

CAVUTO: Looking at your stock of late, it seems to have that late 1990s feel to it. Do you ever worry when the chart picks up as it has, that maybe you are getting heady again?

KRAMER: Well, you know, I don’t think we are. I mean, we are still nowhere near the high numbers we were at in those years. Plus, I mean, if you value us by traditional metrics now, we are looking like traditional companies that are doing well. In those days, we had to explain why our valuations were so high because they were ridiculously high.

CAVUTO: There was some concern about the valuation of the stock, that maybe with the resignation of your co-founder, Tom Calandra, that there might be an issue there, an issue of stock trading. The SEC is investigating him. What can you say -- or update us?

KRAMER: Well, I mean, it is an unfortunate situation, but, yes, the SEC is looking into Tom Calandra’s stock trading records. He’s resigned from the company so he can take that on, head-on, and deal with it. I don’t think that is...

CAVUTO: Now this also concerns stocks that he would mention in his own newsletter, right? So the fear is that maybe he was trading on that before it was published?

KRAMER: Yes, I would guess. We don’t exactly know what they are looking for. He is an unusual character in that he trades the stocks. He does own the stocks he trades in, but he discloses that.

CAVUTO: Right.

KRAMER: And that is very different than our journalists who cover the news, who aren’t allowed to own stocks they cover.

CAVUTO: But what do you make of the CNBC policy now, no stock ownership at all?

KRAMER: Well, I think the CNBC policy is an improvement over what they had before. I think it obviously also has its limits. I don’t think it extends to their columnists or their on-air stock-pickers. So, I mean, I think within limits, it is good. We’ve done the same thing.

CAVUTO: Do you own stock?

KRAMER: I do personally own stock, but I...

CAVUTO: And you disclose that?

KRAMER: No, I don’t disclose it. I’m not part of the news process.

CAVUTO: OK.

KRAMER: But under our new policy which we have just put in, we are just putting in now, I will have to declare all my ownership, all my stock ownerships. And I’ll have limitations on my trading. I’ll have to hold the stock for at least three months.

CAVUTO: OK. Larry, thank you very much. Just want to get the update on that. Larry Kramer, MarketWatch chairman and CEO.

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