(Reuters) - Goldman Sachs resumed coverage on the U.S. Internet sector, saying it presented an attractive investment idea as revenue growth at some Web-based companies would likely outpace consensus expectations.
The brokerage expects the rapid adoption of online retail and the shift of advertising dollars to the online market, will drive growth in the sector.
“Investment spending for many companies will exceed consensus, though we believe above-forecast revenue growth will more than offset those costs,” the brokerage said in a note.
“We expect to see margins flat, as companies invest in development and acquisitions to stay ahead of the changing competitive landscape.”
The brokerage said online commerce and auction site eBay Inc, which is on its “conviction buy” list, was among the companies that offered the best risk/reward proposition.
Online travel agency Priceline.com Inc, daily-deal company Groupon Inc, and Ancestry.com Inc, which operates a website that allows people to trace their family roots by scouring online records, were also among Goldman’s Internet picks.
Reporting by Sayantani Ghosh in Bangalore; Editing by Esha Dey