i own yahoo as well as microsoft and i'm not insane.
similar comparison Barnes & Noble (BKS) and Amazon.com.
"08:55 ET ******
BARNES & NOBLE (BKS) 35 3/4. Let's go straight to the Internet numbers. Before the open Tuesday, Barnes & Noble (BKS) said that Internet sales in the fiscal fourth quarter (Jan) were $31.1 million, up 3.8 times (or 281%) from the earlier quarter. Now, Amazon.com did $250 million in Internet business, which happens to be their entire business in the same period, and lost a ton of money. Amazon.com stock is worth $16 billion in market value. BKS stock is worth only $2.5 billion. Applying the same valuation metrics of sales-to-market-value to BKS as to Amazon.com, BKS should be worth virtually that entire $2.5 billion just on their Internet sales alone. But of course, there is much more to BKS than their Internet sales. BKS is the world's largest bookseller. Internet sales are just 3% of their total business. The rest of that business certainly must be worth something; in fact, it should be worth a lot. BKS also said that they expect to earn $1.54 to $1.58 per share in the year just started (ending in Jan. 2000). That is over $100 million, and even excluding the Internet efforts, that means that BKS trades at a very reasonable 23 times this year's earnings projections. The simple fact is BKS earns a lot of money from those old bricks and mortar stores. In fact, they intend to open 50 new stores this year. Old technologies never immediately (or ever) replace old customs, and a lot of people still shop in the stores. BKS makes a big profit from those stores, which they can use to promote their Internet efforts. In fact, they can use that profit to create severe price competition on the Internet to their benefit. That already may be causing problems for Amazon.com and others. Thus, to Briefing.com, the market values for Amazon.com and BKS appear to be out of whack. If Amazon.com really is worth $16 billion, BKS should be worth a lot more than it currently is. barnesandnoble.com is the fourth largest retailing site on the Internet, and using Amazon.com valuations, that should be worth about $2 billion alone. Yet, they have a very profitable retail chain that is number one in its industry to back it up as well. With BKS stock, you not only get traditional profits at a reactively low 23 times this year's earnings, you get undervalued Internet prospects. One way to look at this is you get a fairly priced stock, with Internet prospects for free. barnesandnoble.com is no fly-by-night site with uncertain prospects. It will succeed. Amazon.com may simply be overvalued, but if it isn't, BKS is undervalued."
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regards
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