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Yahoo Drops 5% on Microsoft Scare
Brett_Tabke




msg:842275
 8:58 pm on Jul 1, 2004 (gmt 0)

[thestreet.com...]

The Sunnyvale, Calif., media giant saw its stock slip $1.77 to $34.63 after Smith Barney Citigroup analyst Lanny Baker cut his rating to hold from buy. Baker, citing the company's rich price-to-cash-flow estimate, said he made the move after the stock passed his price target. Yahoo! is up 63% in just three months.

[sfgate.com...]

Shares of Emeryville, Calif.-based Ask Jeeves closed at $35.68, down $3.35, or 8.6 percent, on the Nasdaq Stock Market.

MSN's engine, which industry watchers didn't expect would come online until early next year, will compete with established search engines from Google Inc., Yahoo Inc. and Ask Jeeves.

[reuters.com...]

"Our primary area of concern remains Yahoo's search relationship with Microsoft's MSN property, although this risk has not changed recently and our downgrade stands separate from this factor," Baker wrote in that note.

 

martinibuster




msg:842276
 9:52 pm on Jul 1, 2004 (gmt 0)

The analyst cited Microsoft's new search technology as a reason for Yahoo investors to worry.

heheh, I guess the analyst didn't try it out. :)

Yahoo seems pretty strong. Not as much glamour as Google, but certainly nimble enough to dodge any threat MS can pose. Overture's Local Match product is something that MS may stick with, as it's a great way of promoting their real estate channels.

bakedjake




msg:842277
 10:04 pm on Jul 1, 2004 (gmt 0)

The point is that with the release of the technology, MS Search has gone from vaporware to "well, they've got something and a boatload of cash".

steveb




msg:842278
 10:06 pm on Jul 1, 2004 (gmt 0)

Vaporware was better than this.

Even more than Google, Yahoo must be relieved that MSN isn't in a psotion to be a competitor this year.

msgraph




msg:842279
 11:24 pm on Jul 1, 2004 (gmt 0)

>>Yahoo seems pretty strong.

I think they are too. Yahoo has shown more good improvements lately than bad, imho. I don't think the investors have to worry about them; they are way ahead of the game.

martinibuster




msg:842280
 11:29 pm on Jul 1, 2004 (gmt 0)

Ask Jeeves lost 8%.

Anybody know if Ask Jeeves can take that kind of punishment and still keep standing?

blaze




msg:842281
 11:54 pm on Jul 1, 2004 (gmt 0)

The concern is that MSN will move away from overture. This will slash Yahoo's revenues.

Google has the advantage of "do no evil". This is a brilliant marketing approach.

Basically, as long as Google can be on par or slightly better than Microsoft, most people will probably want to use Google's results.

MS won't be able to do the same thing they did with IE against netscape, cause the doj will absolutely *freak*.

4eyes




msg:842282
 12:30 am on Jul 2, 2004 (gmt 0)

Google has the advantage of "do no evil". This is a brilliant marketing approach.

But very difficult to maintain post IPO

TrustNo1




msg:842283
 12:36 am on Jul 2, 2004 (gmt 0)

If what i've seen from MSN is any indication of what will be, then Yahoo and Google have nothing to worry about. If fact once MSN goes live with their search, chart the percentage of people using it to search and my money would be on a steady decline. The results are looking pretty bad from an everyday user perspective.

hurlimann




msg:842284
 12:44 am on Jul 2, 2004 (gmt 0)

If so Googles value must have just dropped $2 billion based on Standard & Poor's prior $40 billion valuation.

outland88




msg:842285
 1:05 am on Jul 2, 2004 (gmt 0)

I donít see how Yahoo could be ahead of anybody. Theyíve been using Google data for years until they switched to that sorry masquerade of an Inktomi set-up. Hardly much of a lead on MSN. MSN has set a goal of beating Google. Yahoo has set a goal of getting as much money out of your pocketbook as they can. Once Yahoo looses 30-40 % of their market from MSN Search investors will dump them quick. Add to that alienating quite a few site owners with questionable penalties and a pitifully run Site Match, yeah thatís the stock to buy. Looks like Yahoo is about to reap what theyíve been sowing. Wall Street is smelling a loser. Good riddance.

Eric_Lander




msg:842286
 1:07 am on Jul 2, 2004 (gmt 0)

Investors, and financial advisors react to news. Anyone in the industry has a different taste.

As someone involved in the industry, and not involved in these companies' stocks -- I can only laugh a bit now. There is no way MSN's current search technology could hold pace with Yahoo/Google/Ask right now.

hurlimann




msg:842287
 1:17 am on Jul 2, 2004 (gmt 0)

Eric agreed but "news" is all and MS has a lot more money and skillbase than Google has ever had or will do.

outland88




msg:842288
 1:25 am on Jul 2, 2004 (gmt 0)

If Yahoo were that good there stock would have gone unaffected. Certainly seems like Wall Street is reacting to me. I'll bet Yahoo stock dips lower if MSN totally ditches them. MSN will either go up or stay the same. Yahoo though can only dip loosing the MSN distribution.

skibum




msg:842289
 5:47 am on Jul 2, 2004 (gmt 0)

Looking forward, it would be reasonable to expect Y! [stock] to tumble when Overture gets cut from MSN. Any fluctuations until then are probably just emotional reactions to MSN actions or PR spin. The market is more emotional than rational.

With the negative reaction to Site Match (might Y! ditch it or change the per click billing?) and the loss of OV revenue from MSN syndication, would Y! still be profitable? Didn't Overture revenues account for most of Y!'s profits?

I think G is still in the drivers seat at this point and post MSN launch. Y! is the loser post MSN. If Ask could get a user base and increase the DB size, they could rock as they seem to have some of the best search technology out there.

If MSN and all their money can't come up with something close to Teoma (wasn't that was a pretty small company with nowhere near the resources of MSN prior to being acquired by Ask?) how much of a difference will it make when they go live?

Freedom




msg:842290
 8:39 am on Jul 2, 2004 (gmt 0)

I see this more as a war between Yahoo and MSN instead of Google being in the mix.

Eric_Lander




msg:842291
 11:37 am on Jul 2, 2004 (gmt 0)

I see this more as a war between Yahoo and MSN instead of Google being in the mix.

I certainly agree that this is how it should be. But when MS comes out and says specifically that they want to compete with Google, it's tough not to have G in the mix.

Still, I cannot help but think that this entire situation will only help Google to lose a little of it's thunder.

smayler




msg:842292
 2:33 pm on Jul 2, 2004 (gmt 0)

Interesting email arrived yesterday from Rogers (Canadian Internet cable provider). It appears that Rogers and Yahoo are making a first joint move towards Rogersís customers. They are addressing 800,000 customers.

[zdnet.com.com...]

Big move :)

BReflection




msg:842293
 2:55 pm on Jul 2, 2004 (gmt 0)

Eric agreed but "news" is all and MS has a lot more money and skillbase than Google has ever had or will do.

Last I heard Google had hired as many PhDs as Microsoft.

martinibuster




msg:842294
 3:00 pm on Jul 2, 2004 (gmt 0)

It appears that Rogers and Yahoo are making a first joint move...

Yeah, old news. They inked that deal six months ago in January. Was noted here at WebmasterWorld [webmasterworld.com] when it happened.

skibum makes great points about this affecting Yahoo stocks in the future. Puts them in a bind, knowing the downturn that's coming, about whether Yahoo should 86 the ppc component of their SiteMatch.

Will dropping the ppc component result in less revenue? Probably. Will going straight PFI be a moneymaker? Not sure. Anybody think PFI as a significant income generator is dead?

smayler




msg:842295
 3:05 pm on Jul 2, 2004 (gmt 0)

>>Yeah, old news.<<

Right, they signed the deal in January, but the first email with service offers as a Rogersís subscriber I received yesterday.

Matt1972




msg:842296
 7:32 pm on Jul 3, 2004 (gmt 0)

[cnn.com...]

Powered by Yahoo! search. Interesting shift from Google to Yahoo!, don't you think so?

soapystar




msg:842297
 8:23 pm on Jul 3, 2004 (gmt 0)

[cnn.com...]
its not Yahoo its overture. Another money before quality deal.

Jack_Frost




msg:842298
 9:41 pm on Jul 3, 2004 (gmt 0)

I finally bought Yahoo about 45 days ago with the thought that "all boats will rise". I read somewhere that that $25 billion a year is spent on Yellow Page advertising. How much is spent on trade shows? Trade magazines? Newspaper ads? My belief is that both Google and Yahoo will do extremely well in the future just because the online advertising market is going to continue to grow so rapidly.

Obviously, Yahoo's revenue and earnings are going to take a hit when MSN drops Overtue. And, when MSN rolls out a new search engine (and correspondng ad/pr campaign), Yahoo's stock will drop as shareholders take their gains.

With Sarbanes-Oxley, most analysts are very limited to the amount of information that they can get from a company and with a PE over 150 and a 30% rise in the stocks price over the last 45 days, I think it's pretty easy to see thatt he stock needs to cool.

I still says its a good company with a very promising outlook.

Matt1972




msg:842299
 11:27 pm on Jul 3, 2004 (gmt 0)

Jack_Frost,
your opinion about LOOKSMART stock? What, when?

Thanks

skibum




msg:842300
 7:50 pm on Jul 4, 2004 (gmt 0)

I can't see LookSmart ever being a solid investment. The stock may jump around a little bit but ROI from Looksmart campaigns that did phenomenaly well while MSN was in the game, are returning almost nothing even at only $0.15 per click. Advertisers have to be pulling the plug left and right.

percentages




msg:842301
 4:49 am on Jul 6, 2004 (gmt 0)

>Yahoo Drops 5% on Microsoft Scare

Yahoo's stock is over valued and solely based upon future potential. The analysts seem to have been slow to realize that M$ was inevitably going to damage that potential in the future via both search and email and should have built a much bigger drop into the price a year ago.

The analysts seem to have only seen the play when it is almost over, surely their job was to see it before most of us? Maybe some WW members need to be offered consultancy positions with some brokerage houses.....LOL!

M$ will do considerable damage to Yahoo, it might deliver the final blow to Ask. If anyone thinks Google is going to come out of this smelling of roses they are living a dream. Google might be the biggest gross financial loser of them all.

Think about Internet growth and where all the new users will be heading once M$ has its play active.

Getting a webmaster to switch from Google is difficult, getting a typical tech savvy user to switch will not be easy....but, so what?

The majority of the market is in the non-tech users and the new users, and they are very much up for grabs.

To get them you will need billions to spend on advertising and a mouse trap that truly works.....I dunno, something like an OS maybe?

M$ is holding the trump cards, primarily control of the OS and browser, a very popular free email system, a huge online community, an ISP offering that is growing, and last but not least a huge amount of cash to spend on acquisitions & advertising.

Microsoft's second wind is about to come (next 3 years). They have competition, but I don't seriously see how you can bet against them taking a good percentage of the market for themselves.

Jack_Frost




msg:842302
 4:03 am on Jul 7, 2004 (gmt 0)

Yahoo earnings are due tomorrow. It should be interesting. They'll have to put up some good number to justify this latest run. Still, I'm not in it for the short run. I'm not betting against MSN either. I think this market will have more than one winner. With 35 billion in sales already, search and such is just not going to have the impact on MSFTs stock.

How many of you have clients cutting back in Overture? How many people are finding that clients are not interested in ranking well on Yahoo? Anyone sign up for Yahoo/SBC DSL? How popular are the International Yahoo's.

If I got to my trusty Boston Consulting Group (BCG)matrix, I see a well financed company with a portfolio of stars. Terry Semel seems to have this company going in the right direction in what is a very fast growing market.

Worst case scenario, ownin Yahoo, MSN, and eventually Google gives me a reason to follow the stocks. Helps during high level sales calls when it's obvious that you follow the companies leading the industry.

As for Looksmart, I agree with SkiBum. As most of us have discovered, without MSN, conversion rates are pathetic. Add in a weak brand name, bland technology, poor relationships, and it does not seem like they have much of a future. Of course, they are so small, they could always bet the farm on some risky idea, hit a home run and be the darling of wall street. All that being said, I'd rather play Texas Hold em than buy LookSmart.

Anyone see any interesting internet advertising related stocks aside from the big three?

skibum




msg:842303
 7:35 am on Jul 7, 2004 (gmt 0)

Anyone see any interesting internet advertising related stocks aside from the big three?

Maybe AOL, maybe aQuantive or whoever owns Ave A & the Atlas Suite/GoToast, DoubleClick with Performics has some potential, Linkshare if they IPO'd might be a good bet.

I'd expect the sector as a whole to be positive for a while. Search is going to be hot and rich media will be hot, the stuff in the middle, regular old banners aren't going to be worth much.

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