Adding to the recent debate: I look at broad trends, though I certainly don't claim to be a better tea leaf reader than others. It's just that I act, invest, and trade based on my own personal paradigm. Here's my two cents.
I understand YHOO best in a broadcast media analogy. YHOO has the equivalent on the internet of a string of radio stations. They sell banner adds, and banner adds will make money. But the net does nothing if not offer the advertiser the ability to segment in very small slices. YHOO has a very big piece of the current market for banners. As the base of users grows, that segmentation will continue apace, and YHOO's share will diminish. More and more "radio stations" will pop up as venues for advertising. Barriers to entry are small. And there will be tie-ins with insfrastructure providers, a la Sprint's announced agreement to have !SNAP, not Yahoo!, as the first screen their customers see when they log on. So YHOO's "radio" market will get more fractionated, but the stock seems to be valued on the basis of, and the analyst's opinions reflect the belief that, YHOO will be a dominant player in the mature net.
That's not the end of the analogy. With the coming of broadband access, real time video clip viewing will become commonplace on the net, maybe even the norm for most access. Information rich commercials can be inserted in the clips, and you'll get them automatically when you watch, you won't have to click on an annoying banner. But of course, the video commercials can have their own banners for direct response. In the analogy, of course, we're talking about television vs. radio. And here it will be the local providers of braodband access who possess all the market power, not a search engine like YHOO or a reseller like AOL.
That's my paradigm. If I'm close, eventually the market will understand it as well. Then YHOO and AOL will be seen as early roadkill on the information highway, unless of course they can acquire a CATV company for stock . ( :-D |
