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.
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.
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!
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.
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.
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.
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.