To: Sonki who wrote (13437 ) 1/14/1999 1:24:00 AM From: Alok Sinha Respond to
I will disagree with you on the view that YHOO is a value stock. It is relatively easy to grow revenues 4 to 6 fold when you are a 80 MM company. SUN and IBM make that much on a handful of servers. Try doing that when you get over a billion $. By its valuation today, the market is assuming that all the potential revenues for YHOO over the next 10 years will be realized at the current pace. That is just too much to digest, esp. since most of what they offer to cultimate consumers is for free. I use YHOO website probably 5 times a day - don't even care who advertises on it, and so my use of YHOO does not really translate into $ (just hits for which advertisers are paying). AOL is probably the only company in this internet mania which will make the big bucks. There also there is cause for concern once users start becoming more sophisticated and realize they don't need any spoonfeeding for 19.95 and g to competitors for 11.95. A vast number of AOL users are the once on 300 hours free deals. But they have a substantial base that they can keep intact. I always try to invest in companies at a time when I feel that they are affecting my decision making through their prodcts.
