"Concern" Over Yahoo is Wall Street Hooey
Today Yahoo stock is up significantly on news of surging revenues and profitability. One analyst says that as far as he is concerned, Yahoo is restored to full health.
But other analysts remain very, very concerned about Yahoo's future. After all, Yahoo isn't allowed to turn a profit. Yahoo is evil (hey, I even wrote that myself). Haven't we all learned that companies like this are stupid? (We never bought that line, but that doesn't stop the Wall Street pundits and their journalistic handmaidens from selling this orthodoxy.)
Here's a good one: one of the concerns about Yahoo - which has now driven advertising down to only 60% of its total revenue base with the introduction of a raft of fee-based services - is that most of this growth in revenue is coming from "new business areas."
Isn't that what you're supposed to do? Find new business areas? And if they're so new, aren't these the types of areas that can sustain 50-100% growth rates for the first two or three years?
Who knows why analysts say the things they do. No doubt there are a few firms caught with nasty short positions in Yahoo. Good luck!
Posted by Andrew Goodman
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