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Technology Stocks : Altaba Inc. (formerly Yahoo) -- Ignore unavailable to you. Want to Upgrade?

To: Glenn D. Rudolph who wrote (14644)	10/11/1998 9:51:00 PM
From: marion (Hijacked)	Respond to of 27307

Did Tim Koogle and Company paint themselves into a corner? They seemed to be more concerned about short term stock price even at the expense of sacrificing future revenue growth. Why should such a young company even be so concerned about trying to make 30% plus profit margins? I am of the belief that in any high growth industry you concentrate on growing revenue not profits. . You put your money into obtaining and increasing market share. You concentrate on growing your revenue first . Yes, they beat the street estimates this quarter, but look how they did it. By not spending money. They have close to half a billion in cash sitting in their bank account. The interest income on this accounted for 5 cents of their 15 cent profit. They also cut back spending by deciding to not pay Netscape and Microsoft for inclusion on their browsers. Meanwhile their competition is paying to be on Netscape and Microsoft. Their competition is also spending large sums of money for marketing. Tim Koogle is running the company more like it was a shoe factory that was in the middle of a recession, not a young company in a super high growth industry. It was not too long ago that Prodigy and Compuserve were both better known and had more members then AOL. AOL's strategy was to market heavily. It worked. What is Yahoos strategy. Hoarding cash? But will Yahoo change course? Will they spend some of that cash? This is Yahoo's dilemma. This is where they painted themselves into the corner. Any money they spend on marketing will go right to the bottom line as an expense. The analysts will point out that "look, their profits are going down". On the other hand if they don't spend the money the competition will beat them.