King of the 'portals'. [source techweb]
joe here is an interesting article in case you haven't seen it.
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Yahoo Is On Top Of The Portal World
(07/09/98; 7:49 p.m. ET)
By Malcolm Maclachlan, TechWeb
Yahoo proved this week that a little profit goes a long way on the Web.
On Wednesday, Yahoo posted quarterly profits of $8.2 million, or 15 cents a share. Never mind that this translated into a loss of $35.9 million, or 81 cents a share, once a $44.1 million charge for its acquisition of Viaweb was factored in. Investors pushed the already highly valued stock even higher, up 12 7/16 to 198 5/8 on in early trading Thursday, though it ended the day down 2 3/16 at 184. The stock has climbed so high in recent weeks that Yahoo announced a 2-for-1 stock split Wednesday.
No one has proven Yahoo isn't worth its huge market valuation, said analyst Adam Schoenfeld of Jupiter Communications. Shoenfeld expects Yahoo to keep taking charges from acquisitions, even if those charges prevent Yahoo from showing positive net results in the near future.
"This earnings report is a home run, and Viaweb is a good acquisition," Schoenfeld said. "I think Yahoo has a clear lead in the portal race."
Other analysts agree with this assessment. In TechWeb's feature on the portal race last month, every analyst consulted listed Yahoo as their early favorite.
What makes so many industry analysts optimistic aren't Yahoo's profits, but perhaps a more important figure -- the number of Yahoo users. The company says 18 million people use My Yahoo, a personalized news and information service, up from 12 million just over a year ago. Schoenfeld estimates Yahoo gets 15.5 million unique users a day, and Netrating's Online Observer Report consistently lists Yahoo as the most popular site on the Web. It estimated about 48 percent of U.S. online users visited Yahoo at least once last week.
Yahoo's success is due largely to its ability to anticipate the kind of services users want. Admittedly, on the Web competitors can quickly copy a rival's successes, said analyst Rob Enderle of Giga Information Group. This imitation is often blatant, as in the case of Excite's My Excite service, similar to My Yahoo.
One sobering point, Enderle said, is Yahoo is still showing losses despite its lead over most of its competitors. That revenues aren't higher shows the advertising-supported content model on the Web still hasn't reached maturity.
"The portal model will hold," Enderle said. "[But] somebody's got to sell a real product at some point."
Internet commerce is one area where Yahoo's greatest rival, America Online, has an advantage, Schoenfeld said. AOL has proven itself as a platform for commerce, he said, driving that company to report consistent profits.
Yahoo may also begin to feel heat from the entrance of big media companies like Disney and NBC, which have both signed deals with rival portal sites. But unlike those rivals -- Infoseek and Snap, respectively -- Yahoo probably wouldn't have to give up much control if it signed a partnership with a media company, he said.
Nevertheless, Yahoo may find it needs more brand-name media content. But with a market valuation of nearly $10 billion, Yahoo is approaching the size of these media players; Disney, for instance, paid $19 billion for ABC. Yahoo's size gives it leverage to sign a deal on more advantageous terms, or even merge on an equal basis with a media company, Schoenfeld said.
"Yahoo has separated itself definitively from the rest of the Web companies," he added.
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