There has been a good bit of negative press surrounding Yahoo lately. But is it really justified? This article takes a quick look at what some analysts have been saying, what the search engine has been up to, and whether it’s time to search elsewhere for good news.
If you've been watching Yahoo's stock lately, it must feel a little like a roller coaster that has forgotten how to go back up. As of this writing, it just hit another 52-week low, to close at $24.65 after losing 40 cents, or more than one and a half percent of its value. Stock market analysts have begun lowering their expectations for the company. WR Hambrect analyst Denise Garcia, for instance, lowered her estimate for Yahoo's fiscal year financial results; she figures its earnings per share will hit 48 cents, not 49 cents, and estimates its revenue will reach $4.66 billion.
Why the pessimism? It seems to have been inspired by Yahoo's admission that growth in online ad sales is slowing down. That statement actually affected Google's stock price as well, though not nearly as much as Yahoo's. Yahoo CEO Terry Semel fingered ad spending reductions by the automotive and financial sectors as being behind the slowdown. The fact that he could point to these sectors as being the "problem children" raises an issue I'll return to later. But right now I'd like to ask: does Yahoo deserve the grief it's been getting?
Think about it. This is a company that has been in existence for eleven years. It survived the bursting of the dot-com bubble. It understood and embraced Web 2.0 in all its social aspects long before its rivals (more on that in a bit). It can and has held its own (though only so far) against companies like MySpace that have come from nowhere. To back that I cite recent figures from ComScore Media Matrix showing Yahoo and MySpace as the most-visited places in July to view online video. So why all the long faces when the topic turns to the number two search engine?
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