Editorial: Let's Get Rid of AnalystsWhy do we need analysts? To guide us through these turbulent times? To help us understand when companies do well? Analysts don't have a clue in predicting much of anything accurately. In fact, I put more trust in my weatherman these days. Let's dissect spending forecasts for the holidays. Several weeks ago, everyone -- I mean everyone -- said this holiday season would be an utter disaster. They blamed everything: the economy, the unemployment rate, the possibility of war with Iraq, Thanksgiving being so late, my mother's burnt pot roast. In early October, NPD Group said 89 percent of U.S. consumers would spend the same or less than last year. Earlier this month, things got a bit better as the Consumer Federation of America lowered that figure to 82 percent.
Now, new surveys are out with much more optimistic numbers. The Conference Board said Americans will spend 5 percent more on gifts this year. Likewise, Deloitte & Touche and American Express predict an estimated 3 percent to 5 percent increase. Pouncing on these new statistics, analysts suddenly switched their tune. "Children will still get every present they want," one analyst said last week. Another said consumers are "trying to spend, but not to be excessive." Gee, using waffling statements like that, let me go out on a limb here. Um, I predict that we will have a joyful holiday season and that consumers will buy lots of good stuff for their loved ones. Who thinks I'm right?
The one area where everyone has been optimistic all along is Internet shopping. Online consumer sales for the week ending Nov. 17 were up 28 percent over last year, ComScore Networks reported, while BizRate.com predicts that online sales will increase 24 percent for the month before Christmas. Nice to see analysts agree on one thing.
AOL Should Have Done This Long Ago
America Online is considering making articles from Time Inc.'s magazines exclusive to AOL to help lift the struggling Internet division. Free Web sites has hurt its magazine circulation, Time has concluded, and Web-based advertising is too meager to make up the difference. It's sad that AOL still hasn't figured out how to tap the resources available in its vast entertainment arsenal -- but if officials decide to do this, it would be a big step toward the paid content model becoming a true online reality.