>America Online
Also, remember that AOL entered a proven business with weak competitors waiting to be taken - compuserve, the source, the BBS systems. They had been making money in that business for 20 years, and gotten fat and sloppy.
On the other hand, nobody knows where internet advertising is going (yeah, I know, to the moon!)
There may be a rebellion against all of this schlock on the Internet- regulation, technical protection against ads, etc. Note just the hearings about 'cookies' and privacy this week. Mainstream ad people don't know yet if these ads even work, either. That growth rate may decline. Certainly the growth rate of the Internet is slowing. After all, there aren't even a billion people with a phone line that could accept a modem plug, let alone a billion computers. Once the browser makers have 3x present installed base (70 million browsers now), thats about it. Everybody that has a phone, could buy a computer, anywhere in the world, and might have the very slightest interest in doing so over the next few years. After that things depend on the incremental world industrial and technical infrastructure improvements. Maybe you could eventually interest 10% of the world population in the internet, consistently, away from work (where they won't see that many ads.) That's 600 million. A 9 times upside over a lot of years. It's still good growth and a good business. Just not good enough to excite the story stock players.
So the next couple of years are the last ones for explosive growth. I say if Yahoo isn't extremely profitable by 1999, the stock tanks in the most major way, along with all other internet biz fragile cases like it.
This is no 'hold and forget' investment. This is 'hold for six months if you have the guts.'
-chaz-
P.S. I hear the staff are bailing out - heard anything about insider trading? Is it true? |
