Michelle,
AOL has peoples' credit card numbers (a pretty steady revenue stream)... Yahoo doesn't. About 75% of AOL's revenue comes from those 18 million or so individual credit cards.
At least 75% of Yahoo's revenue comes from advertising. If the stock market goes down big from here, a large portion of the Web economy (advertising money from new IPOs and companies planning to go IPO soon) will dry up. A down market might tend to favor AOL over Yahoo.
My guess is as good as yours about who has better management. One idea I can add, is that the definition of management should be expanded to include Wall Street (PR and acquisitions), the Media (PR), and shareholders (PR). With this expanded definition of management, I would say AOL gets the nod because Wall Street has done more for AOL than just about any other company ever. The Media and shareholders have done quite a lot for Yahoo, but AOL is still the leader that everyone in the industry tries to beat.
According to Zachs, 23 analysts have a STRONG BUY rating on AOL and 12 analysts have a Buy rating. This does not indicate future stock price direction at all, but it does say AOL has a lot of managers steering the ship.
I believe part (or even much) of Yahoo's valuation is a result of the hard work AOL has put in during the last decade to create the online industry.
If you agree, disagree, have different thoughts, please post. Which of the 3 (AOL, Yahoo, Amazon) do you like best for short-run/long-run? |
