FREE ESSAY ON YAHOO STOCKS

YAHOO STOCKS

Eric Czachor 3/19/00
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.