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To: Bill Harmond who wrote (16679)	12/31/1998 11:45:00 PM
From: marion (Hijacked)	Read Replies (1) \| Respond to of 27307

<<Yahoo already is a big part of the Internet. In fact it's the biggest part of the Internet.>> The biggest part of the internet? They made what, 55 million in revenue last quarter. That's the biggest part? Does anyone want to come up with some kind of idea on how Yahoo could ever do a billion in revenue? or a Billion in profit? <<Yahoo's model is extremely profitable...Microsoft-style profitability, 90% gross margins and 30%+ operating margins. >> Yahoo has already stated that they wouldn't maintain that profit margin In reality, they are not even profitable. Microsoft made real money. The cash in the bank came from earnings, not from printing stock certificates, and the earnings on the statement came without account "gimmicks". One of the proposed accounting changes that the SEC considers a "gimmick" is to change the rules on "a pooling of interests". This is when a company buys another company, declares the companies technology worthless, then writes it all of as a one time special charge , separate from earnings. Yahoo did that this year. <<U.S. companies, under fire from federal regulators to clean up their financial reports, are moving more aggressively to nip accounting manipulation in the bud, financial experts said.>> <<Analysts' forecasts can put pressure on company executives to make sure their results meet expectations--and avoid a market reaction that drives down the company's stock price, Borelli said. Levitt pointed to just that pressure in September, when the SEC chairman launched the agency's accounting push. In a high- profile speech, he faulted company executives, auditors, and analysts for using accounting "gimmicks," "hocus pocus," and "illusions" to make earnings meet projections.>> news.com

To: Bill Harmond who wrote (16679)	1/1/1999 10:06:00 AM
From: tonyt	Read Replies (2) \| Respond to of 27307

Microsoft is not a good example. In the 'old days', Microsoft had contracts with IBM (and later the clone's) whereby they were paid on a per/cpu basis. What that means is that Microsofts profits (for the os) were guaranteed. Even if IBM wanted to include DRDOS (which was a better os at the time), they still had to pay Microsoft. Yahoo has no 'lock' on its advertisers (and it gets no revenue from its users, again, something that is different from M$) I'm not too familiar with Yahoo's ad contracts. How far out are they locked in? Are they subject to adjustment? How far in advance are they sold? (i.e. could they have been sold six months in advance, before the current internet boom?) --Tony