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  1. #1
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    Analyst: Yahoo worth more if broken up
    On ZDNet:

    Yahoo would be worth far more to shareholders if it broke up its Internet businesses or embarked on a major overhaul, including a departure from Web search, but management is unlikely to do either, according to an analyst note issued on Friday.
    Jeffrey Lindsay, analyst at Sanford C. Bernstein, said Yahoo's operations viewed separately could be valued as high as $39 per share, compared with a current share price closer to $27.

    The shares rose 2.4 percent in premarket trading to $27.80 from a close of $27.15 on the Nasdaq on Thursday.

    The company, which lags Web search leader Google and faces greater competition for its e-mail services, could be worth as much $45 per share with a dramatic overhaul that would include outsourcing its paid search, cutting staff by 25 percent and restructuring its graphic display advertising, according to Lindsay.

    "It appears that Yahoo will not take bold measures to right the ship," he wrote in a research report. "We believe that Yahoo still has a potentially high intrinsic value. We believe, however, that to stop the inevitable slide into irrelevance the management team must consider more radical actions and strategies."

    Yahoo's main display advertising business appears to have deteriorated, mainly due to the company's troubles in effectively capitalizing on its ad network, Lindsay said.

    He reiterated a "market perform" rating on the stock, with a $25 price target.

    Lindsay said he based his valuation on Yahoo taken as separate businesses on the recent spate of Internet advertising acquisitions, such as Google's planned purchase of DoubleClick for $3.1 billion, among other factors.

    He also recommended that Yahoo give up the fight on paid search and outsource that segment of its business to bigger rival Google

    Source: http://news.zdnet.com/2100-9588_22-6211903.html

  2. #2
    Prince of Content Vinny O'Hare's Avatar
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    It would be worth more if they knew what they were doing. If they had any forward direction instead of trying to play follow the leader and failing the stock would be over 100 by now.

  3. #3
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    inevitable slide into irrelevance
    It's sad to see a former industry leader and innovator become a has been.
    Deborah Carney
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  4. #4
    Affiliate Manager Alan Hamilton's Avatar
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    Quote: "He also recommended that Yahoo give up the fight on paid search and outsource that segment of its business to bigger rival Google."

    I agree with the sentiment that it is sad to see a former industry leader falling by the wayside. I've watched (as an advertiser for 4 years) the steady decline in the quality Y search. It could have been corrected with proper management, but they lacked that foresight and I suspect were distracted from reality by management ego that lived too long in the past.

    What is even more disconcerting about this however is the suggestion that they outsource their search operations to Google. The competitiveness of the PPC market is for all intents and purposes a non issue at this point. G is not only in the drivers seat, but they also own the gas stations and service centers.

    I am a fan of Google, but I also believe that when any company gains such absolute control, there is reason for great concern. In this case, especially for the PPC reliant advertiser. Of course, on the other hand, if Y did outsource its ppc business to G, it could nudge the FTC even closer to what I believe will be an eventual anti-trust / monopoly action.

    Y could have / should have taken serious action four years ago. They did not, and I doubt that they will do what is necessary to reverse their downhill slide. Nothing is so certain as constant change, and Y has never displayed an ability to deal with change or lead the pack with innovation. Sad indeed...
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  5. #5
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    It's just one person's opinion. He probably has some G stock for all you know. And they used to use other search engines services before. Google for the main results, bought up Inktomi, AllTheWeb, Altavista, Overture for the PPC etc. And they just switched to a more Universal Search just recently and are still in second as far as search. So instead of giving up or outsourcing again, I think they just continue to work at it and chip away if possible. And I think it's good for us and everybody to keep them all separated.

  6. #6
    Member lookingfortips's Avatar
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    I was under the impression that Google is pretty well known for click fraud. Not the company itself but from people who click on ads they host on their own website or by those who click on competitor's ads in order to mess with their funds and statistics. All PPC services will have some problems but I have heard some pretty scary things from others who have tried it.

    Yahoo has an intense screening process for those who want to host ads while Google lets just about anyone host ads. There is no filtering system. At the most, the ad hosting privileges are only taken away after a site is caught violating the terms of service. Then with all these ebooks coming out every other day telling the naive they can make a fortune from Google ads I must say that network intimidates me.

    Like someone else said, if Yahoo outsourced their PPC program to Google a monopoly would pretty much be born.

    What is everyone's opinion about Google's PPC program? Some swear by it while others I personally know tell me they almost lost their butts with it.

  7. #7
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    "What is everyone's opinion about Google's PPC program?"

    Better than Yahoo and MSN provided they don't slap me

  8. #8
    Member lookingfortips's Avatar
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    Quote Originally Posted by Trust
    Better than Yahoo and MSN provided they don't slap me
    Well, I'll start out with $100 then to see how it goes. I've done Yahoo (love it) and Go Click (scam) so hopefully Google will give me some good results. Thanks!

  9. #9
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    Quote Originally Posted by lookingfortips
    Well, I'll start out with $100 then to see how it goes. I've done Yahoo (love it) and Go Click (scam) so hopefully Google will give me some good results. Thanks!
    Here is a thought. Go to EcomEXPO which is coming up soon. Google will give you like $50 credit. So will Yahoo and MSN. Only applies to new accts.

    That said, you want to watch your spending limit as PPC can get really really expensive.

  10. #10
    Member TonyCafaro's Avatar
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    If your not an affiliate Yahoo! is great the business model is built on content and desire to keep viewers there longer. Google is more relevant based and throws you off ASAP because they know you'll come back. My advice is don't invest money in the group, but never say it's a bad service. It's a full fledged educational outlet for current events. If you want to make money on Yahoo! Then spend the time and money to get your page rank up & leverage the result of Google recognizing and ranking you higher over there!

  11. #11
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    I don't get the outsourcing search. Will that really make more people go to yahoo? Have their numbers really changed since taking their search in-house? And betting their worth based on recent acquisitions that were made in part to compete against yahoo?

    Pretty poor analysis.

    Chet

  12. #12
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    Quote Originally Posted by loxly
    It's sad to see a former industry leader and innovator become a has been.
    remember Excite, Hotbot, BlueMountain, Netscape, AOL ... ?

  13. #13
    What's the word? Rhia7's Avatar
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    Quote Originally Posted by waytogo
    remember Excite, Hotbot, BlueMountain, Netscape, AOL ... ?
    How about Alta Vista?
    ~Rhia7 -- Remember the 7
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  14. #14
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    Out of all of those, I think alta vista is the really big loser of just not understanding what they had and how to promote it. Bonus point for those people around long enough to remember the original horrible url they stuck with for way too long.

  15. #15
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    interesting how things turn out -- wow, do we remember Altavista, Excite, AOL, etc. Feels like we just visited "search graveyard." For fun, I looked up the analyst salary for Jeffrey Lindsay at Sanford Bernstein as mentioned in the article here...impressive salary. Thanks for the walk down search lane.

  16. #16
    Grandma broke her coccyx! Uncle Rico's Avatar
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    Quote Originally Posted by Vinny O'Hare
    It would be worth more if they knew what they were doing.

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