Historically, Yahoo has generated much of its revenue from the sales of advertising (74% and 68% of its 2003 and 2002 revenues account for its marketing services). From its media advertisements, sponsorships, and text-link advertisements, it has resulting much of its revenue from side to side this medium. 18% to 22% of its fee revenue is developed from consumer and business services with its fee paying customers rising to 8. 4 million people since last year reflecting growth in these services. Global audiences grow to about 263 million in 2003 this is up 23% from the end of 2002. Marketing services business was just about 40%.
Competition Yahoo! ‘s most significant competitions are Time Warner and Microsoft. Time Warner is an integrated media and communications company engaged in online services. It has a large customer base through AOL. Microsoft is the largest software company in the world and it provides numerous Internet products and services. They can sell software through online subscriptions. Weaknesses Yahoo! needs to expend important interior engineering resources and obtain other technologies and companies to give or enhance their ability. They need to work on their piece of the international section.
They need to get additional information concerning other countries. In international markets, they face considerable competition from Internet Service Providers that offer their possess navigational services. Financial Ratio Analysis Financial Ratio Measurements Yahoo Google Microsoft Ratios such as current ratio, debt to equity, ROE, and ROA indicate Yahoo is a financially strong company and consistent with its competitors. Current ratio indicates company is liquid (more so than competitors) which should be valuable to shareholders by reducing risk and shows the company can take on more risk as well.
Need essay sample on "Competition Yahoo!"? We will write a custom essay sample specifically for you for only $13.90/page
Debt to equity is also a strong indication of its ability to handle more risk. These ratios are also a reflection of the stability of the stock. Profit Margins Profit margins for Yahoo indicate a consistency with its top competitors. Growth All the variables indicate that Yahoo’s growth exceeds competitors. Conclusion Based on our research of stock price analysis, our recommendation is to BUY. Projected net sales continue to grow for Yahoo! and it has plenty of room for further steady growth.
The higher income in addition reflects on improved operating margin. The 52 week high was priced at $39.14, while the 52 week low was $25. 26. The current price as of 5/2/05 was $43. 29. The expected baseline price I our estimation was $46. 32. This recommendation is based on our assumption that the long term growth rate for the firm will be 7% using the Corporate Valuation Model and 9% using the Discount Dividend Model.
Reuters, Yahoo! Inc YHOO. O (NASDAQ), retrived on February 22, 2007 from http://stocks. us. reuters. com/stocks/ratios. asp? symbol=YHOO. O&WTmodLOC=L2-LeftNav-16-Ratios The New York Times, Business; Yahoo Inc, February 22, 2007, retrived from http://markets.on.nytimes.com/research/markets/overview/overview.asp?symb=YHOO