Commentary: Hey, DoubleClick's profit warning could have been worse. Don't be surprised if you hear that rationale from Wall Street analysts after DoubleClick surprised absolutely no one with its admission that its fourth quarter and first quarter won't meet expectations. How can these analysts find a bright side? It's pretty easy because they were expecting much worse from DoubleClick. Following DoubleClick's warning, you may even see an "Intel effect", a profit warning that almost comes as a relief since everyone expected it anyway. Of course, DoubleClick chief financial officer Stephen Collins wasn't relieved to be toning down estimates again, but there were a few bright spots. First, the gory details. On a conference call with analysts, the company said it will report earnings in a range of a loss of 3 cents a share to break even. According to earnings tracking firm First Call, DoubleClick was expected to post a profit of 2 cents a share for the December quarter. DoubleClick also said it sees fourth quarter sales in the $126m to $129m range, down 8 percent to 10 percent from what analysts were expecting. There will also be a host of fourth quarter charges too. And just like analysts expected, DoubleClick also said the first quarter would be a stinker. The company said it expects to report a first quarter loss of 5 cents a share to 7 cents a share with sales up 5 percent, or about $115m, from a year ago. First Call consensus projected a loss of 2 cents a share for the first quarter. So where's the upside? Think of DoubleClick in relative terms. It looks a lot better than its peers, has a lot of cash ($893m) and said something very important -- it's holding the line on its rate card. Rest assured that DoubleClick will look much better than Engage Technologies, which reports earnings after the bell. As for 24/7 Media, it needs more funding. It's just a hunch, but I'd say DoubleClick is well aware of the psychological games on Wall Street. If you're going to issue a profit warning, do it now because things are so bad that anything better than bankruptcy looks good. In a research note ahead of DoubleClick's conference call, Merrill Lynch analyst Henry Blodget said he never saw a company schedule a negative preannouncement conference call a day ahead of time (the release came out Friday). He also noted that most estimates were high and with DoubleClick trading at $11 with $6 in net cash, there's "probably little downside". One analyst already took the bait on the "bad news is good news" theory. He noted on the conference call that he thought DoubleClick's news would be worse. Gotta love those analysts at WitSoundView. They were way ahead of the pack when it came to flagging online ad worries and now they're even handing out a rare "sell" rating. In a report from analysts Lisa Hass and Jordan Rohan, WitSoundView lowered its rating on Terra Lycos from "hold" to "sell". In most cases, analysts pull out the dreaded "sell" rating only when it's too late and a company is about to fold. Terra Lycos has plenty of cash -- even though its burning through a lot of it -- and is a top Web property. The downgrade was based on some good legwork and the theory that Terra Lycos has no chance of delivering the $900m in revenue it promised for 2001. WitSoundView is projecting $794m in revenue for 2001. What's even more alarming is that Lycos' run-of-site CPMs have dropped below $1, according to WitSoundView. Ouch. The brokerage firm also doesn't see profitability until the first half of 2002. Terra Lycos' problems are compounded by fierce competition in its core Latin America market. Bottom line: Lycos is a $9 stock at best. You should cut and paste WitSoundView's call on Terra Lycos for future reference. If recent history is any indicator, WitSoundView is often ahead of the pack and could pave the way for a slew of downgrades. See ZDII for US tech investor news. See techTrader for more technology investment news, plus quotes and research. Have your say instantly, and see what others have said. Click on the TalkBack button and go to the ZDNet News forum. Let the editors know what you think in the Mailroom. And read what others have said.