A sputtering economy, implosions at financial institutions, or just plain bad management -- on any given day, investors can name a number of reasons to sell a stock. Yet while panic is never beneficial to investors, it's good practice to play devil's advocate with investments from time to time.
In Motley Fool CAPS, more than 120,000 members have weighed in on nearly 5,400 stocks, sharing bullish and bearish opinions alike.
In the case of Internet mainstay Yahoo! (Nasdaq: YHOO), a total of 4,637 members have weighed in on its chances of success. I've already plucked out some of the bullish rationale backing Yahoo! today, so here are three counterpoints to consider, courtesy of CAPS:
A leader no more: Many argue that Yahoo! has lost its edge, that its search properties can't compete with Google's (Nasdaq: GOOG). And the cost to stay competitive is only increasing as other deep-pocketed competitors like IBM (NYSE: IBM) and Akamai (Nasdaq: AKAM) are also constantly improving capabilities and creating innovative products. In an attempt to keep up, Yahoo! has purchased numerous companies over the last couple of years but the bottom line is its R&D spending isn't translating into revenue anywhere near the rate that it once was.
Losing market share: Competitors such as IAC's (Nasdaq: IACI) Ask.com have recently inched higher in market share, but Yahoo! continues to lose market share to Google, which remains far ahead. Since, a pairing between Microsoft (Nasdaq: MSFT) and Yahoo! that could have helped challenge Google didn't work out, many see the trend continuing.
Broken deals: In addition to Microsoft's rebuff, Google walked away from its ad deal with Yahoo!, which could have potentially brought in up to $800 million more in revenue a year. It's rumored to still be in talks to buy Time Warner's (NYSE: TWX) AOL unit, but some give it a low probability of success, seeing it as a difficult and high-risk deal to make work.
Of course, Yahoo! has survived despite dozens of obstacles in the past. But the question about whether the company can piece together a lucrative future for investors is why CAPS is such a great resource to augment your own analysis.
To see what the very best CAPS members are saying now about Yahoo!, just click on over to Motley Fool CAPS and have a look -- it's all free, and even open to your opinion.
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