Yahoo Will Never Recover
247wallst.com
247wallst.com
Yahoo's so called "razor thin margins" exceed the historic norm for large corporations by nearly 50%.
Any comparison to a company that has yet to (or ever will) make a profit is irrelevant.
Fast-growing in buzz, slow-growing in revenue.
Not saying that Yahoo will recover, but you never know.
Makes sense, but I won't go as far as saying Yahoo! will never recover, but it's certainly very difficult.
Will never recover? May be if they start something new and small that can grow in the future!
> Bing is off to a remarkably good start. Microsoft has historically had 8% to 9% of the US search market compared to Yahoo!’s 20% and Google’s 65%. Early results show Bing’s share surging as high as 13% of 14% in the three weeks after its introduction. [emphasis added]
Still, interesting read. I actually feel better about Yahoo after reading it - I didn't realize they had that much cash in the bank. That means that barring an epic screwup, they've got at least 5-10 years to develop a new big revenue source. I wouldn't count them out yet, but they do need to develop some new products that make cash.
Other than that, it is an entirely incompetent piece:
1) He appears to think that acquisitions can only be paid for with cash. 2) He does not explain why he thinks search is Yahoo's critical business: Carol Bartz does not seem to think it is. She may well be wrong, but he needs to explain why he thinks so. 3) MS may be willing to invest heavily in search, but throwing money at something does not guarantee results. 4) Yahoo can afford deals such as the one MS has made with Verizon - especially as the wording he quotes implies that the payments are being made over a period of years and are likely to be covered by the revenues it generates. If MS is willing to make unprofitable deals to gain share it will make Yahoo weaker in that market, but he gives no evidence of that. 5) Yahoo has huge amounts of traffic, and a lot of good products. Even the search engine is at least on par with Bing.
I have no idea if the guy is right or wrong on his premise, but his analysis of their business isn't too far off from how I see it.
- Powerful words for those who just skim front page headlines
- Referencing stocks at lowest $9 when right now they are in a healthy $15.
- Words like mistakes, doomed, failure, layoffs
I know I will lose some karma here, but this kind of FUD shouldn't be tolerated here in HN.
We should know better how to detect it and how to eradicate this pest from news sites.
The DOW was above 12K last year.
The DOW right now is around 8K.
Nobody foresaw the economic recession.
If your opinion can be so easily manipulated by throwing numbers out of context then I can not be of any help.
As a shareholder you should know that.
Either way.. none of that matters. Where the dow was or is doesn't matter.
What matters is shareholder equity. The ONLY job of Yahoo is to make value for its shareholders. They rejected a very fair offer from Microsoft. I don't care one way or the other of Yahoo sells to Microsoft as long as Yahoo management can lay out a clear plan for creating more value for shareholders than the Microsoft deal would've.
It looked to me, and loads of other YHOO investors (including Icahn) that they made a decision based on some silly anti-Redmond attitude.
More importantly... your post seems to betray a sense of how this world works... Shareholders don't "ask" to sell a company. In some cases a board will shop for a buyer (essentially putting a for-sale sign out) but most often that's done only if the board feels they can't protect shareholder value without finding a suitor.
It's not about some burning desire to cash-out Yahoo stock. It's about the idea of turning away a made-offer, turning away cash, a premium on what the market currently values the company. If you're going to turn away cash in hand, you better have a reason. You better have a plan. NOTHING that has happened since Yang turned-down Microsoft has suggested that they have a plan.