Update on Yahoo and eBay
Hmmm, I posted this in my prognostications:
Ebay - EBAY. Perhaps the luckiest company in the world. They created the marketplace. But will they continue to grow at such a rapid rate? No way will ebay match the growth of last year. They are too focused on their treasured individual seller marketplace and too leery of creating a real marketplace for NEW products. Plus, consistent/reliable revenue increases are what drive the company (to avoid instability in the stock price). This means innovation is less important than measured growth. BORING. This being said, there must be hundreds of really bright employees feeding ideas that will become Ebay spin offs from either it’s internal R&D dept or from their founder, http://www.omidyar.net/.
Stock prediction: up 20% by year end.
Yahoo - YHOO. Being rightfully accused of being too conservative and “me too”. I am worried that the company is too big and diversified without enough focus on where to be #1 or innovation. That said, Yahoo is full of a lot of smart people and there will be some changes in the next 3 quarters. And, unlike Ebay, because so diversified, can afford to innovate without threatening stock performance. What Yahoo should do is leverage their “fun/trust” and “ease of use” by cobranding other services, as they did with SBC. Imagine Yahoo Loans (partner with Intuit or Lending Tree), Yahoo Insurance (Geico), Yahoo Movie Tickets (Fandango), Yahoo Movie Rental (Netflix or Block Buster), maybe even Yahoo Shopping using Yahoo Wallet, one way to buy from anyone.
Stock prediction, huge correction in Q2, down to the high 20’s, but will be up 30% by year end.
Let's see-looking at them both after Q1/Year over year, I have to say I am more hopeful about Yahoo and less so about eBay.
Yahoo has something that differentiates from Google (main threat w/respect to innovation). That is: BANNER ADS, aka "graphical media". Yahoo reported that their top 200 advertisers (aka, deep pockets) increased spending by 38% YOY. That's huge--and the pockets should continue to open. Yahoo is the MASS MARKET of the Internet; just need to make sure new users keep coming--which is where Google is taking pieces.
eBay-think they are getting greedy with their loyal installed base. Instead of upping user fees, I think they should open up their marketplace to NEW products from the big retailers. Huge oppty. But their culture of controlled growth (read: no innovation) is going to strangle them. I'm thinking their 12% drop in after hours is a bellweather. eBay will have their first real, significant correction.
Despite their stock split, I wouldn't buy for quite some time. By Q4, perhaps they will pick up again.
Ebay - EBAY. Perhaps the luckiest company in the world. They created the marketplace. But will they continue to grow at such a rapid rate? No way will ebay match the growth of last year. They are too focused on their treasured individual seller marketplace and too leery of creating a real marketplace for NEW products. Plus, consistent/reliable revenue increases are what drive the company (to avoid instability in the stock price). This means innovation is less important than measured growth. BORING. This being said, there must be hundreds of really bright employees feeding ideas that will become Ebay spin offs from either it’s internal R&D dept or from their founder, http://www.omidyar.net/.
Stock prediction: up 20% by year end.
Yahoo - YHOO. Being rightfully accused of being too conservative and “me too”. I am worried that the company is too big and diversified without enough focus on where to be #1 or innovation. That said, Yahoo is full of a lot of smart people and there will be some changes in the next 3 quarters. And, unlike Ebay, because so diversified, can afford to innovate without threatening stock performance. What Yahoo should do is leverage their “fun/trust” and “ease of use” by cobranding other services, as they did with SBC. Imagine Yahoo Loans (partner with Intuit or Lending Tree), Yahoo Insurance (Geico), Yahoo Movie Tickets (Fandango), Yahoo Movie Rental (Netflix or Block Buster), maybe even Yahoo Shopping using Yahoo Wallet, one way to buy from anyone.
Stock prediction, huge correction in Q2, down to the high 20’s, but will be up 30% by year end.
Let's see-looking at them both after Q1/Year over year, I have to say I am more hopeful about Yahoo and less so about eBay.
Yahoo has something that differentiates from Google (main threat w/respect to innovation). That is: BANNER ADS, aka "graphical media". Yahoo reported that their top 200 advertisers (aka, deep pockets) increased spending by 38% YOY. That's huge--and the pockets should continue to open. Yahoo is the MASS MARKET of the Internet; just need to make sure new users keep coming--which is where Google is taking pieces.
eBay-think they are getting greedy with their loyal installed base. Instead of upping user fees, I think they should open up their marketplace to NEW products from the big retailers. Huge oppty. But their culture of controlled growth (read: no innovation) is going to strangle them. I'm thinking their 12% drop in after hours is a bellweather. eBay will have their first real, significant correction.
Despite their stock split, I wouldn't buy for quite some time. By Q4, perhaps they will pick up again.
posted by Twain at
10:10 PM
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