To Buy Yahoo On the Dip, Or Not?

It’s tempting to buy the big dip in Yahoo Inc. shares that occurred after Microsoft Inc. withdrew its takeover offer. But I’ll pass. This space is too crowded: too many people are interested in Yahoo stock judging by the over 225 articles appearing on Yahoo Finance the day after the Microsoft volte face.

In addition, I still hold to the view that sites like Yahoo.com are being undermined by declining cost/technology barriers, which enable one or two good programmers to run websites that can take away business from offerings like Yahoo Personals. For more explanation, if you like, see my blog post awhile back on Oct. 18, 2006, entitled Web 3.0 is here now says programming whiz.

Besides, my personal experience using the Yahoo website suggests Yahoo is in a bit of downward spiral. I have been a loyal user of Yahoo since email was the killer app online, but the feeling is growing that Yahoo is under the gun so much that it is being driven to dilute its franchise.

For example, more and more SPAM seems to be ending up in my Inbox. And messages that should be going into my Inbox are going to into the BULK file. And my outgoing emails sometimes end up in the BULK files of recipients.

Comments

[buyforeclosures]

Not exactly a way to justify your point of view. Email? They all do that. I HATE my GOOG email. It is a nightmare... I am buying Yhoo and its well worth the bet...it may take a year but I will get $33 or more

[billddrummer]

Innovation drives the internet business, and with YHOO consumed by takeover rhetoric, innovation takes a holiday.

The most profitable portion of any web service is its advertising, and revenues generated from displays. YHOO's advertising revenue hasn't kept pace with GOOG, despite its initial dominance of web based email.

It may be that a fundamental review of the business model will be needed to unstick YHOO from the mire. But in the meantime, the company has to keep fending off potential acquirers while watching its profitable edges whittled away by the GOOGs of the world.

[WAKEUP]

"To Buy Yahoo On the Dip, Or Not?" So far, I have yet to read an article that raises the "To-buy-or-not-to-buy" question, in which the author ultimately says, "Buy." Same as this article. So, what's the point of the article? Doesn't this leave you where you started; that is, not having bought the stock in question?
But, what the heck, I guess you had a couple of minutes on your hands, there at home, while the next pot of Kona finished brewing.