Behind the third-quarter profit slid of 38 percent amid slowing revenue growth Yahoo is actually lucrative
Peter Cokewood
Oct. 17, 2006

The stock has become lackluster and the street has started hating it. Internet bellwether's strategy is in question to many in the Wall street. Behind the third-quarter profit slid of 38 percent amid slowing revenue growth Yahoo is actually a target of the Smart money. Yahoo’s performance in coming quarter can be solid. They are actually taking their time to take the right strategy to aim at Google – their main competitor.

The stock after hours first slipped and then smart money started buying it for accumulation. Yahoo is being accumulated for quite some and the volume patterns manifest the same. After hours the stock went up 3%.

Google’s biggest revenue is from ads and ads in third party sites. Yahoo is in the process of completing their beta program on the same. Yahoo has formulated how they will avoid click fraud that hurts advertisers. Yahoo will be in a position to challenge Google.

As for search engine, Google’s dominance is also being questioned. Yahoo has a very loyal surfer group that uses the search engine. Yahoo trades at 28 PE and Google trades at 60. Is Google twice as good as Yahoo?

That is the question investors have to answer. With Yahoo getting better and Google trying to ways to keep growing at the current rate, Yahoo’s low PE compared to Google’s is actually attracting the smart money.

Behind the third-quarter profit slid of 38 percent amid slowing revenue growth Yahoo is actually lucrative
Peter Cokewood
With Yahoo getting better and Google trying to ways to keep growing at the current rate, Yahoo’s low PE compared to Google’s is actually attracting the smart money.
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