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Technology Stocks : Altaba Inc. (formerly Yahoo)
AABA 19.630.0%Nov 6 4:00 PM EST
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To: john defreitas who wrote (25747)9/3/2000 11:50:07 PM
From: Doug Fowler  Read Replies (2) of 27307
 
Yahoo is highly dependent on revenue from banner ads, and banner ads perform terribly for those purchasing them.

When $2 per CPM returns less than 20 percent in sales (i.e., it takes $2 in banner ad spending to get 40 cents back), then something has to give.

And $2 per CPM is considered VERY cheap. Yahoo charge 5 to 25 times that amount.

In the "good old days" of spend all your money doing deals with the Yahoos, the attitude was "we don't care about the return and we don't even bother measuring the return -- the key is to get big fast".

Well, today, profits matter and I cannot think of a single company that can actually make money running banner ads -- I have talked to many, and the consensus has been that most have "pissed their money in the wind" with banner ads.

No one is going to argue about Yahoo's position in the dot-com world.

But Yahoo is going to have to find another way to squeeze money from its supporters.

And given Yahoo's still very lofty valuation, there is FAR more room for significant downside than there is for upside.

In my opinion, Yahoo is trading at least twice what it is worth, and it would have to be selling at $25 per share before my appetite would be ready to purchase....
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