Dave....I see MadDog has answered most of your questions. I've added the additional observations only.
There are x number of people who spend x hours on the net. As such, the net can support only so many portals successfully. The industry will reward the first movers. The also-rans will be **absorbed** or destroyed. (Note I used the words absorbed rather than consolidate/integrate. The terms are interchangeable in the context I'm using them in.) MadDog's concerns that low barriers to entry will erode this advantage seems to question the rationality of the new portal makers. Would I start a new newspaper ? Not unless I was an irrational Rupert Murdoch....and even then, the success isn't guaranteed. People like routine, people resist change, people have brand loyalty built into them - unless there are clear benefits to be derived from changing the established habits. What benefit would an alternate portal have to offer ? And I would think YHOO would incorporate the emerging products more successfully. There always are survivors and there are new companies. If companies evolve, they survive, if they don't evolve, they perish. It is true of YHOO as muc as of any other firm. But it is easier to evolve and survive than it is to create a new successful entity.
<No money to be made by YHOO shareholders if they buy the other company >
Are you saying YHOO shareholders will lose money or YHOO itself will lose money due to dilution in earnings ? I'm not sure I understand this point. In any case, YHOO shareholders gain long term - as you know alliances, acquisitions, mergers are not only made for short term earning potential of the combined entity. Often there may be other strategic reasons.
My RR example was to illustrate the brand power and brand loyalty means a lot. I believe RR cars division is no longer owned by RR ? So effectively the car isn't a Rolls. The name has survived with the premium ! The analogy I want to draw is that once established as a leader, YHOO may well survive its competitors.
However, the point most longs have is that should YHOO survive, our investmentwould have paid off. Should it fail to take off in the long term, there is money to be made in the short term. Either way, there is money to be made.
More later. Regards. |
