Yahoo’s Results Get Dumped On

Quick comment on Yahoo’s results:

While the Street wasn’t apparently all that fond of Yahoo’s quarterly results yesterday, my view hasn’t changed. This is still a solid turnaround story, with Panama’s near-term contribution underestimated, and the potential for improved search share and traffic monetization all there as well.

Sure, people took expectations too high, and there is legitimate nervousness about how Yahoo will ramp revenue growth to 20%, as it’s forecasting. But there is lots of slack in the system, and still plenty of overhang on Google, like the DoubleClick deal, that will make the latter search stock the choppier of the two.


  1. So Semel was not shy with his Panama comments leading up to this. All the “high expectations” are now burned out of the market, I see July calls somewhere in my future…

  2. good question is how Google handles bringing Doubleclick into the business. Of course, this was a big headline that everybody saw so it seems Google’s moving up today while Yahoo heads down.
    Isn’t Doubleclick the largest aquisition Google’s made yet? Most of the other companies they picked up stayed separate or small enough to just disappear inside the whole. Doubleclick is a pretty immense operation. Or does Google just wipe Doubleclick out and keep the name? (3 Billion for a name? why not?)

  3. Wow, you’re really going to beat this YHOO thing into the ground, aren’t you? The long slow decline at YHOO has begun, as advertising sales has peaked and Semel has no idea how to manage an engineering process like building Panama. You’re going to be riding this into the ground unless you reverse course sometime soon.

  4. I think the $3B is for the huge ad inventory and client base.
    Integrated into G’s ad platform and analytics these are a better profit center than they were for DoubleClick.
    Oh, and there’s the name too, who double clicks on ads?

  5. Ajay — Yahoo has been a good pick in the search space so far this year, beating GOOG 3:1. You’re arguing otherwise? FWIW, today’s selling is also overdone.
    Mind you, YHOO is still more of a trade than a long-term pick for me. But the turnaround story remains compelling, and I love all the skepticism.

  6. That 3:1 uptick has been entirely over the last 2 1/2 months, as there are fools out there who actually believe that Panama is ever going to produce anything. Do you honestly believe Panama will ever go anywhere? It’s good to see that you might be skeptical about YHOO long-term, but I think we’ll see over the coming year that Panama will not amount to anything, even over the short-term.

  7. I think I’m one of the only people who agree with you, Paul.
    A lot of people seem to be enjoying being down on them and Semel rather than looking at the whole picture.
    Heck, in June/July when there was a large sell off, people were proclaiming they were done, that if you bought, you’d never get your money back. Well, prior to this anouncement they were a few cents away from a complete recovery, and you would have made around 12% on your investment in six months.
    I think they are a great play on these sell-offs. Maybe not a long term powerhouse, but the doom and gloom is overblown.