

Yahoo Will Never Recover - empone
http://247wallst.com/2009/06/21/why-yahoo-yhoo-will-never-recover/

======
Gibbon
Biased much?

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.

------
tybris
> Yahoo! has not developed any effective strategy to have any presence in the
> fast-growing social network sector.

Fast-growing in buzz, slow-growing in revenue.

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Dilpil
Is there a financial news site that gets high tech? Everything here seems
perfectly reasonable if your talking about a company making widgets and
doodads, but not so much for intangible computing based products.

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fossguy
I heard the same thing in the past about Nintendo and Apple... They are dying,
will never come back, etc.

Not saying that Yahoo will recover, but you never know.

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pierrefar
Summary: Yahoo! doesn't have the profit margins nor the cash to be able to
make aggressive maneuvers. Google and MS on the otherhand can.

Makes sense, but I won't go as far as saying Yahoo! will _never_ recover, but
it's certainly very difficult.

~~~
jobu
This article is at least 5 years late. It's been ages since Yahoo! was on the
top of anything. They appear to be following in the steps of Alta Vista.

~~~
encoderer
They're still on the top of the list of most trafficked websites...

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stse
I think one of the cooler things coming out of yahoo was the "Yslow" best
practices. But the guy in charge of that left for google around late 2007,
early 2008. From what I've read they seem to have "lost" a lot of other people
too.

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csomar
Yahoo! is just less useful, I think in the future people won't ue its mail
system, search and hosting. Even the developer zone will be replaced by other
growing third party services like nettuts.

Will never recover? May be if they start something new and small that can grow
in the future!

------
lionhearted
Interesting piece - reads correct, but I wouldn't count out a company with 3
billion in liquid reserves. Wow. Also, this set my Small Sample Size Alarm off
some:

> 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.

~~~
graemep
I was surprised by the amount of cash they have too.

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.

~~~
encoderer
You can't buy a company with stock as weak as Yahoo's lately without paying a
disgusting premium.

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.

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TweedHeads
How to detect propaganda:

\- 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.

~~~
encoderer
$15 is healthy compared to $9 but not when compared to the $30-40 range that
I, as a Yahoo shareholder, would've been paid a year ago.

~~~
TweedHeads
Yahoo stock was over $100 in the year 2000. Did shareholders ask to sell the
company then?

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.

~~~
encoderer
I didn't own YHOO in 2000. But you're quoting a stock price from the apex of
the tech bubble.

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.

