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yahoo

yahoo The Yahoo stock has taken a huge drop and has taken the rest of the stock market with it. The first quarter sales are set to be 40% off last year’s estimates. The stock is down 92 % from its peak, which was set on Dec 30, 1999. The Yahoo stock has been in a steady downfall since its peak. There were also other drops in technology stocks. Cisco and Intel predicted big revenue drops and job cuts. This set gave the NASDAQ a 5.3% fall. The index is off 59% from its peak, which was reached last year. Since Yahoo’s birth in 1995, the company has not had to deal with anything close to the dilemma it is facing now. They know have to deal with problem without their CEO Tim Koogle, who recently stepped aside. It was not too long ago that there were rumors of “Yahoo buying Disney”. “Now Yahoo would be lucky if Disney buys them.” Yahoo was once worth $134 billion, is now valued at less than $10 billion. Yahoo gets almost all of its cash from online advertising. This has proven to be a good way to get cash in the past five years. At first all of Yahoo’s 160 million visitors were interested in these advertisements. But these advertisements seem to have lost their luster. “ Few people are clicking on those flashy top-of-the page banners.” It seems that only .01% of visitors click on the advertisements now, compared to .06% of visitors a couple of years ago. This is interesting statistic compared to the fact that even junk mail gets a 1%-to-2% response rate. The Yahoo Company is almost completely dependent on the ads. Unlike AOL, who are a service provider as well as a content provider. AOL collects $21.95 per person a month, whereas people using Yahoo get their Internet access elsewhere and are used to paying nothing for content. When the CEO of Yahoo tried to extract even a small fee from users of Yahoo’s auction service, 90% of the users stopped using the service. Yahoo will now need to find a new CEO, will Yahoo currently fending off potential takeovers with a two-year $500 million stock buyback plan. This leave’s the company with $ 1.5 billion in the bank, giving it time to figure out how to make more money on its own. Although it might hard for Yahoo to stay strong when AOL and Microsoft are becoming so dominant. Yahoo is certainly going to have to find some other source of income besides Internet ads. It seems that the people are using other site beside Yahoo and that they are becoming least interested in looking at ads. This is probably because people are becoming a lot more accustomed to the internet and no longer what these ads are. Or it could be that certain people are not using the internet as much as they used to. It that other internet corporations have also been suffering over recent times. Bibliography:

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