I see a lot of response to this post. Most of it has already been discussed. I'd like to add a few points of my own. FOr a very technical analysis of why PE's shouldn't matter, please visit the new AOL thread
a) YHOO is one of the first portals to offer international coverage. Even if we discount product expansion and consider only ad revenue, that should monopolise eyeball traffic. I had discussed India, Japan, China with MadDog in one of the posts. Do the combined and exploding populations and emerging economies of India and China count for something ? Does the lack of infrastructure create opportunities for YHOO ? You bet it does. Multinationals are falling over themselves to take a piece of the cake. Do you think it will be any less for internet ?
b) YHOO is constantly evolving - introducing innovative products and services. Purely from ad revenue point of view, doesn't that translate into more space and $$$ ? Number of services multiplied by n times international coverage.
c) Thru business alliances, YHOO is promoted in schools. Catch them young. Do you think that counts for brand recognition...? How much is that worth in terms of future potential ?
d) While AOL/AMZN and the rest innovate and find other sources of revenue - you expect YHOO to remain static ? I believe someone mentioned commission on air tickets etc ? Right now this revenue is small becoz it is not incorporated into the business model. Should YHOO choose to flex its muscle, this can become significant portion of its revenue. The choice alone makes the business model very promising and flexible. YHOO is currently building its customer base....its wooing customers by providing free services. Once customers are hooked, and if there is a revenue shortfall, there can be ways of generating revenues from that base. Building the base is much more difficult.
e) Somewhere down the line if all else fails, if YHOO is not able to make it alone, I'd think it would be acquired. That being so, how can our investments be jeopardised ?
The above are SOME arguements which contribute to YHOOs status as a potential money spinner....with a lot of space to manouver. These are perspectives, the big picture.
Of course I may be wrong. But by the time you prove to be correct, I'd be a millionaire. At that point - who cares ?
Being long on this stock is a win win. |
