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To: Bill Harmond who wrote (69142)	7/23/1999 11:45:00 AM
From: Eric Wells	Read Replies (3) \| Respond to of 164684

>>Man, Eric. This is wild thinking. Here's why I don't like Yahoo (at least at it's current price around 145): 1. It has a price/earnings of 650 and a price/sales of 105 (very high in my opinion). 2. I view Yahoo as being a "search engine" of sorts - the vast majority of the site is dedicated to a categorization of web page links. When I drill down through Yahoo's categorized pages of links, it is not long before I reach what I consider to be "junk" - or links to pages that provide little value (that is to me personally). As such, I see the vast majority of Yahoo as being akin to a big directory of the web - akin to the Yellow Pages. 3. The design of Yahoo's site is basic and easy to navigate - and the leaness of the site makes it fast. But in truth, they've done nothing to the design of their site in years (looks pretty much the same as it did in 1996). 4. Yahoo is trying to enhance it's value by offering other services - such as Auctions, Games, etc. However, I don't believe they charge for any of these. 5. It seems that Yahoo garners most of it's revenue through Advertising - I'm still not convinced that the internet advertising model is a big money maker. 6. To the best of my knowledge, Yahoo does not employ any proprietary or patented technology in the running of their web site. Taking all of the above into account, I have trouble seeing how Yahoo commands a $30 billion market capitalization. I remember in 1995/96, I looked at buying Yahoo stock and I said to myself "how can I buy the stock of this company - it's nothing more than a bunch of web pages with links - anyone with a web server and a database can do what they are doing." Of course, at the time, I didn't consider the possibility of internet companies to exist with 500+ P/E ratios for years (and yes, I do sometimes contemplate the foolishness of my decision to not buy the stock in 1996). Today, however, I still view Yahoo as being a bunch of web pages with links - of course today, it is a bunch of web pages with links valued at $30 billion. So the rational side of me says "how can this be - how can this company be valued at $30 billion? It's nothing but a bunch of web pages with links." And the realistic side of me answers "Yahoo has a market value of $30 billion because internet stock speculators have pushed up the price of the stock beyond all rational justification." Of course such thinking has never kept internet stocks from going even higher. So - I'm open to hear other views. Why should Yahoo be valued at $30 billion? Thanks, -Eric Wells