These are good points -- barrier to entry is much less for Internet companies than it is for the manufacturing types.
Which, of course, subjects Yahoo to much more potential competition.
AOL, Microsoft, Lycos, Excite, Infoseek/Disney, and many none of us have even heard of yet.
It would be interesting to know the ratio of telephone and cable revenues in the United States compared to the rest of the world.
I happen to think Yahoo will be one of the winners.
Its stock price reflects a tremendous amount of optimism.
At ten times its current revenues/profits, Yahoo would be earning about $8 a share annually. At its current stock price, that would translate to a P/E of more than 40.
I can see Yahoo getting there, but I still contend that growth beyond that would be significantly lower.
Yahoo did $76M in revenues in its latest quarter. 167M page views per day. That translates to about one-half cent in revenues per page view over the quarter.
It would seem reasonable that the price per page view will go down as the number of page views goes up and as more competitors offer cut-rate prices to sell unsold page views. By the time Yahoo reaches 10 times the number of page views, they could produce 50 percent to 75 percent less in revenues for each one than they do today.
So, to achieve 10 times the revenue of today, Yahoo might need 20 to 40 times the traffic.
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