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Dueling Fools: Yahoo! Bear Rebuttal

By Chuck Saletta – Updated Apr 5, 2017 at 4:56PM

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Do you really think Jerry Yang is the next Steve Jobs?

Where have we heard this story before? A company's founder comes back to rescue it from the brink after his successor leads it astray. Oh, yeah -- it sounds like Steve Jobs and Apple (NASDAQ:AAPL). The problem is that there's a huge difference between what Jobs did at Apple and what Jerry Yang is trying to do at Yahoo! (NASDAQ:YHOO).

Jobs saved Apple from obscurity by delivering new, innovative, and breakthrough products like iPod, iTunes, and iPhone. Those new-to-the-world products thrust Apple into entirely new markets and revolutionized those industries. At Yahoo!, on the other hand, Yang seems to be trying to out-innovate Google (NASDAQ:GOOG) at developing platforms for contextual Internet advertising.

News flash about Yang's strategy: It has been tried before. Apple never did manage to dethrone the Microsoft (NASDAQ:MSFT) and Intel (NASDAQ:INTC) duo in the computing industry, in spite of a far better interface and comparable performance. To borrow Apple's winning marketing slogan, Yang and Yahoo! have to "Think Different" to succeed. Going up against the titan of the industry? Why should Yahoo! be any better at it than Apple was?

As for Ryan's assertion that it's difficult to muster a scenario where Yahoo!'s stock doesn't trade at least 20% higher within a couple of years, I can think of one. How about if the company continues to post lower margins, waste money on buying back its overpriced shares, and try to take on the Google behemoth on that behemoth's home turf?

For Yahoo! to thrive, it needs to focus on really improving its core strengths. Yahoo! Email and Finance would be great places to start. Bring back the magic, the speed, and the data quality along with the new features, and I just might be convinced.

You're not done with the Duel yet! Go back and read the other entries, sound off in CAPS, and then vote for the winner!

Yahoo! is a Motley Fool Stock Advisor pick. Both Microsoft and Intel are Inside Value selections.

At the time of publication, Fool contributor Chuck Saletta owned shares of Microsoft and Intel. The Fool's disclosure policy isn't the only thing keeping him out of Yahoo!'s stock right now.

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Stocks Mentioned

Microsoft Corporation Stock Quote
Microsoft Corporation
MSFT
$237.92 (-1.27%) $-3.06
Alphabet Inc. Stock Quote
Alphabet Inc.
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Apple Inc. Stock Quote
Apple Inc.
AAPL
$150.43 (-1.51%) $-2.31
Intel Corporation Stock Quote
Intel Corporation
INTC
$27.52 (-1.96%) $0.55

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