George R

67% of Yahoo Visitors Using Email: SmartAds Should Target Those Users

I agree. Yahoo just needs to slow down a bit and catch it's breath. Wall Street and much of the media have been brutal to them over the past few months. I, for one, believe the decision to move aside Terry was a good one. He was far too expensive in my view.

I have noticed Yahoo insiders buying stock and exercising options without dumping the shares directly into the market in recent months. I also like what I've seen from Susan Decker. We'll see.

I think the Yahoo e-mail group is about as loyal of a following as you get these days. And SmartAds seem far less intrusive to me there than they would/do during an "entertainment" session (i.e. watching short vidoe clip or watching a joke unfold through animation).

Don't count out Yahoo. While Microsoft and Google duke it out, these folks might just be laying the groundwork for an exciting end run.

Here's a related article I wrote a few weeks back:

Cashing Out!

Has anyone noticed the tech industry sell-off recently? I mean the tech "insiders". Folks like Eric Schmidt, John Doerr, and Bill Gates ... as well as a slew of other investment bankers, Chairmen, directors, CEO's, and VPs within some our supposedly strongest technology companies?

I have, especially in and around Google.

I am not a financial analyst. Far from it. But I do know a thing or two about the stock market and advertising. I have been in or around the advertising business for over fifty years now. I've also watched a lot of tech companies rise and fall. I have a vested interest in the technology industries in that I own several companies who participate in the domain name branding and graphic arts content development sectors, both of which are affected by changes in the public perception of, and confidence in, some of the larger companies in our industry. I'm usually the eternal optimist, but I'm worried.

I've watched a handful of publicly traded Internet, software, entertainment, and telecom companies over the past 120 days very closely. Here's a list in descending market cap order as of Monday, August 6, 2007:

- GE/NBC Universal ($399.40B)
- Microsoft ($277.09B)
- Google ($158.59B)
- IBM ($154.82B)
- Apple ($117.48)
- Comcast ($80.29B)
- Time Warner ($72.30B)
- Disney ($68.43B)
- eBay ($45.83B)
- Yahoo ($31.19B)
- Amazon ($32.49B)
- Adobe ($23.24B)
- WPP Group ($17.82B)
- IAC/Ask.com ($8.08B)
- Baidu ($6.93B)
- Getty Images ($2.07B)
- CNET Networks ($1.11B)
- Jupitermedia ($242.00M)

Of these, only GE, Apple, eBay, Amazon, and Baidu had an increase in value over the prior three months. Amazon gained the most market value (roughly $4.5 billion) compared to second place Apple at just under $3 billion, while Google led the losers with a drop in market value of just over $10 billion, with Microsoft a close second at around $9 billion. Any wonder why one of Google's lead investors, its CEO, and other key executives are selling off shares?

In all, the six major U.S. search engine companies in our analysis (Google, Yahoo, Microsoft, IAC/Ask, Time Warner/AOL, and CNET) lost a whopping $34+ billion in just three months. I thought profitable search advertising was growing like wildfire? On the other side of the world, China's leading search engine company, Baidu, gained almost a billion dollars in value, among the strongest we've studied on a percentage basis.

I must be wrong. I also thought we had been in a strong bull market until the adjustments a few weeks back. Wasn't the 14,000 breakthrough a sign of good news for all industries, including "tech"? Better think again. Look at where we are now!

The money these tech companies are now paying for relatively small online advertising companies is astronomical. Is it possible that all these online advertising companies, and some of their major clients, have been able to "hype" these tech oriented companies and their executives? Now wouldn't that be the ultimate "spin"? Don't you just love the ingenuity of these Madison Avenue types ... especially the newer generation that lives on Main Street and focuses on the online world.

With all of these players (technology, communications, entertainment and advertising) now singing from the same song book, and working together on development, effectiveness, measurements, promotions, PR and content delivery, do any us lay people really stand a chance? Open your checkbooks.

"Vaporware in advertising"... don't you just love it?

**********************...
Back to Yahoo.

Is it possible Yahoo has had this right all along? Although their market value has slipped substantially, their executives seem to be buying Yahoo shares, not selling. They are able to test new graphic advertising techniques without making a multi-billion dollar outside investment, like Google and Microsoft have chosen to do. Wouldn't that be a "kick" if Yahoo has indeed spent this time of industry turmoil and chaos to strengthen its relationships with its advertisers, business partners, content providers, and customers while Microsoft and Google concentrate on destroying each other at all costs.

I am a little biased because I've stuck with Yahoo for the past ten years through thick and thin. But this does make for a compelling alternative to all the negatives I've read about the company from investment bankers, select journalists, and others over the past six months.

What do you think?

George P. Riddick, III
Chairman/CEO
Imageline, Inc.

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