I've acquired the film rights to Yahoo!'s
Shares of Yahoo! fell into the single digits earlier this week. Google
Thankfully, both stocks have bounced back from those milestone lows, but what's going on here? When did online search become a dirty word?
Even Microsoft
Google, Yahoo!, and Microsoft make up the country's three largest search engines respectively. It doesn't get any prettier if you keep going down the line. Ask.com's parent IAC
So are the markdowns overdone? I think so.
Don't get me wrong. The fundamentals have soured somewhat on these companies. You see it in how analysts have been hosing down their year-ahead forecasts for the search-engine medalists.
2009 EPS estimate: |
3 Months Ago |
Today |
---|---|---|
|
$24.17 |
$22.39 |
Yahoo! |
$0.55 |
$0.48 |
Microsoft |
$2.40 |
$2.29 |
Source: Yahoo! Finance.
The market fears that online ad dollars will dry up, as advertisers adjust their budgets to discretionary spending patterns. I get it. I do. However, we're talking about 2009 profit targets that have been reduced by 5% to 13%, not the sharp drops that the respective stocks have suffered.
There's an opportunity here. I made my case for buying Yahoo! this week, and that's the most problematic of the three. With ad dollars migrating online eventually, it's the place to be. Now it's just a matter of picking your horse and buying your race tickets at $300, $10, or $20.
Other ways to spin the content bottle: