September 16, 2011 | In: Technology
Will Yahoo Survive?
I have written about Yahoo before, and how the company (and its stock) has no future. Some of my opinions were wrong (but some of them were right, remember that post about Netflix a few days ago before it crashed yesterday?), but do I now think that my opinion about Yahoo was wrong?
In short, no, I still stick to what I said. I think Yahoo, regardless of the shifts of CEOs, is still a hopeless company. See, the problem is with Yahoo’s business model. Yahoo is a search engine, and a bad search engine, and not only that, it is a search engine that is no longer using its technology, but rather Bing’s outdated (and maybe stolen) technology (well, if you really want to call it a technology).
Yahoo’s search results contain a lot of spam, and a lot of manipulated results. Not only that, ask any advertiser using both Yahoo and Google to advertise his products about the performance of each, and he will definitely tell you that Google is a much better performer than Yahoo. I know quite a few companies (because of my other job) that were using both Google and Yahoo for advertising, and now stopped using the latter completely.
Yahoo seems so distant from the new social networks it’s not even funny. Why would anyone on this planet think that Yahoo would still be relevant 10 years from now, unless they’re preparing the new super search engine that will return the results as soon as you’re thinking (forget about speaking) of something. So, while the company is trading at a P/E of 16, and that’s not that high, I think the price to earnings ratio should be something close to RIMM’s (around 5). Yahoo’s main business is the search engine, will anyone use it in a few years remains question (well, not for me anyway).
Yahoo investors, get out, the stock is doomed and it should be priced at a mere $4.4 to reflect the future performance of the company, in other words, YHOO is overpriced by 238% (YHOO is currently trading at $14.89).
To conclude, no, Yahoo won’t survive, it’s only a matter of time before investors realize that nothing can be done to save this company, and they will all jump ship.