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Déjà vu All Over Again

By Tobin Smith

So I was flying back from Scotland last week (after a GREAT golf trip with a personal best score for me at the links at Turnberry, the site of the 2009 Open) and reading my accumulated pile of newspapers.

For a second I swore we hit a time-warp over the Atlantic -- I half expected to see the pilot come walking back in an all black open-shirt outfit, a la the Internet bubble days in Silicon Valley.

Almost every headline had something to do with the Internet and how it was changing the business of some company.

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Transformational change ... can you recognize it and do you know what to do when you see it? Click here to find out how you can ride the next ChangeWave to profit.

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Here are some samples from The Wall Street Journal:

"Beer -- with a Demographic Chaser" -- Anheuser-Busch is starting its own "Bud TV" channel online to try to follow its consumers to the media they spend the most time on.

"Cisco Expanding into Consumer Electronics as It Aims to Jazz Up its Stodgy Image" -- about how Cisco Systems is changing its logo and ad campaigns to paint itself as a more hip online consumer-oriented vendor.

"Tom Freston Fired as Chief of Viacom" -- fired mostly because he failed to get the deal that sold MySpace to News Corp for $580 million -- an online site with less than $20 million in revenue at the time of sale.

In 2007, Bud says they will direct 10% of their $600 million ad budget to the Web.

Cisco is trying to convince investors that it is the lord of the online network -- that place where you will get all your media and entertainment.

Viacom (after splitting itself into a CBS operating group and media company) fired one of its best executives (he was paid over $20 million in salary and bonuses for 2005) because the man did not get the Internet?

I'm having more flashbacks than Timothy Leary at a Grateful Dead concert.

Waves of transformational technology change do have a cycle of:

1) Hype
2) Ultra-hype
3) Disappointment
4) Devastating disappointment
5) The trough of disillusionment
6) Honest and realistic assessment
7) Rebirth as what it was, not what it wasn't

We are going through the seventh step of transformational change -- and it's breathtaking to observe.

WHAT LIES AHEAD

We are starting to once again invest in the transition of content and information delivered to you wherever and whenever at breathtaking speed because it is now FINALLY happening.

The fact that a brilliant guy who delivers 75% of the profit to a billion-dollar company is fired for not being aggressive enough in online media by an 85-year-old guy (Sumner Redstone) is really all you need to know about the online media world's relevance to media in general.

We'll soon see 100-megabit broadband to your home, car, laptop or mobile device, and it's breathtaking to see the applications and new services coming out of the world's most online country (South Korea) right now.

But the real excitement in the world is that the Web 2.0 Wave -- i.e., the Web we thought we had but didn't in the late '90s -- is now very real, very profitable and about to have another major growth spurt.

How insane would it sound for me to have made that statement in 2002? That year marked the trough of disillusionment in the Web wave, but we are WAY past that stage and back to loads of profitable investment areas with years of secular growth.

The best part is that we can now ride these waves on profitable companies that will get ever more profitable -- i.e., real value is being created for shareholders.

All hail the Web -- the world's largest wealth-creation machine is indeed alive and well.

Toby

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Tobin Smith is the founder of ChangeWave Research, the editor of ChangeWave Investing and ChangeWave Microcap Investor and a contributing market analyst for Fox News Channel. His market commentary can be found twice weekly in the ChangeWave WaveWire and he provides more specific recommendations and advice through his ChangeWave Investing service. Transformational change ... can you recognize it and do you know what to do when you see it? Click here to find out how you can ride the next ChangeWave to profit.