
Yahoo Closes At $13.76. What A Train Wreck. - jasonlbaptiste
http://www.techcrunch.com/2008/10/08/yahoo-closes-at-1376-what-a-train-wreck/
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iamelgringo
I don't know. The hackers that I've recently talked to that work at Yahoo seem
pretty happy with the place.

There might be more pink slips and cost cutting in the future. But they are
coming out with some pretty cool open source technology and getting some
decent street cred with developers: Hadoop, YUI, BOSS, Web analytics. They're
seen as "getting" open source in the developer community.

Maybe it's too late for them, but I have the feeling that the hackers as
Yahoo, under Jerry Yang are going to start putting out cool new products
again, and eventually the stock price is going to reflect that.

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davidw
You're completely right about the cool open source stuff. How do they connect
that with making money, though?

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helveticaman
With the original CEO at the helm, they might have the same success Apple had.

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maxklein
Seriously, is Michael Arrington being paid to trash Yahoo? Yahoo stock price
may be low, but how does that affect the company itself? TechCrunch posts news
like it's trying to force Yahoo to collapse.

And seriously who wants a Microsoft Yahoo merger apart from Michael Arrington?
Should so much power be concentrated?

It's STOCK! The company already made the money from the stock sale, whatever
price outside traders want to bet on is not relevant. I think I'll be buying
some Yahoo stock actually.

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utnick
Well I would assume it affects the company because employees have no reason to
stay until their stock options vest because their options are worthless now.

Also, the executives of a company care about the stock price, because if it
goes too low, the investors will call for their heads. This pressure can make
the executives do things like reduce expenditures and headcounts.

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rgrieselhuber
And yet their P/E is still at 19. If Yahoo really sucked that bad, wouldn't
they be cheaper?

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Prrometheus
They can always increase that ratio by lowering their earnings.

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kirse
I hate how TechCrunch seems to idolize Google stock, as if its not going to be
hovering at around $40-$50 in the next 18-24 months.

The market in general is going to be coughing up some blood for awhile, and
I'm going to bookmark this post and send it to Mr. Arrington when I'm proven
right. I remember owning Yahoo at $300+ (which split) back during its high-
flying days, and Google will be no different with its heavy reliance on
advertising for revenue.

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SwellJoe
I'm curious why you believe GOOG will be trading at around 3 times earnings?
That just doesn't even make sense to me, and I'm having a hard time imagining
_anything_ short of total economic collapse that could lead to such an
unlikely scenario.

While GOOG may not be bottomed out at ~$340 (I bought a few shares at $349,
and am pretty happy with the price...and if it keeps dropping, I'll buy more,
once it starts climbing again), I just don't see how you can possibly imagine
it's a $40-$50 stock. Terrible companies trade at better than three times
earnings, average companies trade at 10 times earning, and I don't think
anyone is going to accuse Google of being a terrible, or even an average
company. Google would pretty much have to start bleeding money to trade as low
you're suggesting is inevitable.

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systems
why are you happy for buying google at $349, you bought at a high price, the
price dropped ~ $10, you lost $10 a share ... what is happy about this story!

really i want to understand your point of view

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SwellJoe
_why are you happy for buying google at $349, you bought at a high price, the
price dropped ~ $10, you lost $10 a share ... what is happy about this story!_

Obviously, because I've wanted to buy some GOOG for a while now, and it's been
way too expensive. Maybe it was still a few bucks too expensive and my
enthusiasm for the company blinded me to the still dropping state of the
market...but I think Google is one of the best companies in the world, and
it's currently trading at a fair price.

If I believe that Google is going to weather the economic storm better than
the average company (I do), and I believe that rapid inflation is going to
insure that any money that I keep in cash is going to decline in value (I do),
and I believe that Google revenue is going to grow faster than the returns
from a CD (I do), and that when the market comes to its senses in a month or
two or three it'll realize that GOOG is one of the best companies in the world
and worth more than 22 times earnings, particularly given the _huge_ stockpile
of cash Google is holding (I do), then I don't feel too bad about missing the
bottom by a few percentage points. And it's only 12 shares (so, $120 on a
$4400 holding). And, like I said, if it keeps going down, I'll try to spot the
bottom, or maybe wait until it actually starts a steady climb, and buy a few
more shares.

 _really i want to understand your point of view_

Do you understand it now?

Basically, I just view it as a chance to own shares in a great international
company at a dramatic discount off of recent valuations. It's not a "bargain"
stock, even now, but that's because it is a stronger company than most of the
stocks that were hit as hard. Yahoo has been hit far harder, but they're
obviously not as good a company--though I think they're being maligned
unfairly. They're still a great media company...they just have some problems
making money. But I think Yahoo probably _is_ a great buy right now.

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kirse
Do you really believe that a company that makes the majority of its income
from advertising will hold its value through one of the worst recessions were
facing in a long time?

There's going to be some major spending cutbacks across the board over the
next couple years because there HAS to be (from people to business to
government), and advertising/marketing is going to be at the top of the list.
There is a fundamental shift in the economy right now - credit is drying up
and people are going into conserve and save mode.

There's no way in hell Google will have a $15 EPS two years from now, you can
put this post in your calendar for October 2010. So yes, when Google's EPS is
something like $1.50, it will make a ton of sense when they're trading at
$40-50. Unless they've got some mysterious source of income, advertising is
going to suffer horribly in this recession and so will the companies that
depend on it.

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SwellJoe
_Do you really believe that a company that makes the majority of its income
from advertising will hold its value through one of the worst recessions were
facing in a long time?_

Umm...yes?

But, at least you're making a little sense now. I don't believe they will lose
as much revenue as you think. Marketing does decline in a downturn--but it
also retreats to quality (i.e. the overall ad spend declines, but what is
spent is refocused on the best performing tools). And AdWords is among the
absolute best bang for your bucks advertising model available. Anybody that's
doing even basic metrics will know that (I advertise on a half dozen different
networks, and AdWords is pretty much the head and shoulders best performer,
and in response to that knowledge I've increased AdWords spend, and decreased
spend with folks like AdBrite and Yahoo). Also, the downturn will hit smaller
advertising networks much harder than Google, who have _huge_ cash reserves.
Google will survive. Many of its competitors will not. So, the number of
places companies can advertise is going to get smaller, possibly a lot
smaller.

So, while I agree that everything is going to see cuts, including marketing, I
don't think it's going to just stop. As long as a company is in business, it
_must_ be marketing, or it'll die soon after. If you aren't reaching people
every day, you can't survive. Cuts will happen, and some of Googles customers
will die off, but marketing spend isn't going to dry up any more dramatically
than other aspects of the economy--maybe less so, since it is core to making
money. And companies really want to make money now.

So, long-term, I'm still bullish on Google. Particularly if the stock price
continues to drop. I should probably shake down some of my friends at Google
for hints on how much impact this is really going to have on their bottom
line...but I'm kinda running on gut feeling right now. So, I could be wrong,
and you could be right. I'm not betting any money I can't afford to lose, but
I'd certainly like to win rather than lose.

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cbrinker
Wow? Seen Bear Stearns lately?

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SwellJoe
I see prices like that for the most popular website on the Internet, and I'm
sad that I don't have any more cash in my trading account. (I already bought
GOOG with all that I had handy.)

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timtrueman
What about Yahoo!'s stake in Alibaba and Yahoo! Japan?

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LPTS
Maybe Jerry Yang should give Steve Ballmer a call and see if he's still game
to buy Yahoo at 43 a share (or whatever it was).

