Where’s the Bottom for Yahoo?
Last year I started looking into whether or not Yahoo (Symbol: YHOO) might rebound. I determined that if they did, it would be quite some time. And it looks like I was right.
This month has been particularly hard for Yahoo stockholders. Just one month ago Yahoo’s stock was at $23.80. Today, it fell to $19.18—a 24% decline. So we’ve got to ask the question. Just where is the bottom for Yahoo?
Recently news came out that Yahoo would lay off as many as 1,000 workers. Alarms are going off. The last time Yahoo had a massive layoff was about seven years ago. They were trying to survive.
If the company was overly bloated, the 1,000 layoffs might come as good news for shareholders, but this isn’t the case. Yahoo is starting to sink fast. Could they partner with or be bought by Microsoft Corp. to forge a bigger presence, which may help get back some market share from Google? Time will tell.
Think things will get better soon? It’s highly unlikely. Even Yahoo co-founder and CEO, Jerry Yang, said that a big payoff for the company wouldn’t happen before 2009. “This sort of transition takes time,” Yang said.
But, let’s not get overly technical about Yahoo’s business model, which is very reliant on advertising. We only need to know one item of data to see that Yahoo’s stock can still sink.
Advertising on the Internet continues its explosive growth—just look at Google—yet Yahoo’s revenue from advertising is declining.
Recently, Yahoo reported that net income for the fourth quarter was down $63 million from the same period in 2006.
Could we see a dip in Yahoo’s stock to $15-$17? I think it’s highly possible.
HAHAHAHAHAHAHA!!!!!!!!!!!!!!!!!
Comment by Joe — February 1, 2008 @ 11:00 am
Microsoft has made a bid for Yahoo. The $44.6 billion offer comes in at $31 per share.
It’s going to be a fun ride. Microsoft has basically said that they won’t be taking no for an answer.
Comment by Jason Martin — February 2, 2008 @ 8:51 pm
We have had a deposit account with National City bank in Buffalo Grove Illinois for longer than I can remember. We recently noticed that our deposits were not showing up until long after we deposited the funds. We have a small vending machine business and almost everything we make (cash) goes into the same savings account at National. The deposits have been showing up as late as 30 days after the deposit. The account has a substantial amount of money in it but we don’t need it for anything, so we have not been worried. However, my husband called National City to find out why the deposits were taking so long to post. They explained that the bank was having some issue and going through some changes and it is a temporary problem. This frightened us, so we started reading about National City on the web. We began to realize that National City Bank is in danger of bankruptcy and if not bought will fail. We also found out that their FDIC coverage may not cover all of our deposits, in all of our accounts. We decided to remove all our money and equity loan to a bank other than National City. Closing our equity line with them was easy because it had a zero balance. we simply opened a new line at Chase and closed the National City line. However, moving our savings and other accounts turned out to be very difficult. We wanted to get a certified check for the funds, so we set up an appointment with National City to do. We went in for our appointment only to find out that the bank could not cover our withdrawal. We were told that the bank was having some small and temporary solvency issues and we would be notified when they could either transfer funds or give us a check. I asked if there was any sort of a problem with our account or had we done something wrong. They politely told us they only wished they had more customers like us. However, it has been almost a month and they have not produced our funds. We have started now working with the Attorney General in Illinois to try to recover our retirement savings. It is apparent that National City is going bankrupt and unless they are bought or bailed out we cannot get our money. We are scared to death that National City will loose both our retirement and the money set up in trust for our mentally handicapped adult child. Does anyone have any advice?!
Comment by Lilly — April 4, 2008 @ 3:25 pm
Yahoo lost the search engine battle to google long ago, I’m surprised they have lasted this long. Without some major restructuring, how can their stock ever rebound? I don’t know where the bottom is, but if Yahoo does not do something soon, we will surely find out.
Comment by Repay — May 22, 2008 @ 6:22 pm