Cramer- "Hedgies Miss Yahoo!'s Growing Big Picture"
Enviado: 9/10/2003 14:49"Hedgies Miss Yahoo!'s Growing Big Picture"
By James J. Cramer
10/09/2003 09:27 AM EDT
"Growth, that sweet elixir, was present in many forms on the Yahoo! (YHOO:Nasdaq - commentary - research) call. There was growth in broadband, which Yahoo! says should go from 25% to 50% of America in a couple of years. There was growth in paid services on the Net, which now includes millions of people. There was growth in users, which seem to go up by double-digits in a linked quarter basis. It was a cornucopia of growth.
Of course, the hedgies all are bogged down in whether it could have been 11 cents, not 10 cents. They all are focused on the confusing "guidance" going forward because of the meet-up of Overture (OVER:Nasdaq - commentary - research) and Yahoo!, eloquently described by George Mannes Wednesday on TheStreet.com.
That, of course, is because the hedge funds want to know the next 78 cents of Yahoo!. The next $7.80, they are leaving to the bigger-picture boys.
I have never heard more of a contrast than I did last night between those who look at the next nanosecond of Yahoo! and those who are looking at the big picture. Not to praise either camp -- to get to where Yahoo! trades to $60, everything has to go right over the next year or two. But, and this is a huge but, everything has gone right over the last year under Terry Semel and Sue Decker, so maybe it still can.
Yahoo! is in an amazing position that few other companies are in: It literally can pick and choose among the highest-growth markets it wants to enter. Does it want to dominate sports? It can do that. Does it want to dominate business? It can do that. Entertainment? It can do that. It just depends on what the viewers and advertisers want. Yahoo! is like a cable network that can choose which areas it wants to highlight, and everyone else is so desperate to connect with Yahoo!'s growing audience that they will pay to play.
Think of it like this: Remember Cox (COX:NYSE - commentary - research) the other day trying to make it so it doesn't have to pay ESPN a couple of bucks per viewer? Well, Yahoo! is in the opposite position; it is getting people to pay it to run stuff with the hopes that Yahoo! will send a little traffic their way. That's a tremendous business model.
Here's some irony. This is the business model that AOL (AOL:NYSE - commentary - research) once aspired to have under Bob Pittman. But Pittman so extorted the providers that he almost wiped them out and the viewer experience wasn't as good as that on Yahoo!, plus he made you pay for it! Yahoo!'s free. AOL's model was short-term greedy, Yahoo!'s model was long-term greedy. The latter always wins.
So, let the hedge funds bicker over the "guidance." Stay focused on the business model that allows Yahoo! literally to coin money because no one, with the possible exception of Google, comes near it right now. Yahoo! is a cable monopoly without the infrastructure costs of the cable companies and without the payoffs necessary to keep a monopoly going because it has earned its monopoly.
Nice business.
Oh yeah, the hedgies say, but why didn't they do 11?
And people wonder why hedge funds underperform. "
(in www.realmoney.com)
By James J. Cramer
10/09/2003 09:27 AM EDT
"Growth, that sweet elixir, was present in many forms on the Yahoo! (YHOO:Nasdaq - commentary - research) call. There was growth in broadband, which Yahoo! says should go from 25% to 50% of America in a couple of years. There was growth in paid services on the Net, which now includes millions of people. There was growth in users, which seem to go up by double-digits in a linked quarter basis. It was a cornucopia of growth.
Of course, the hedgies all are bogged down in whether it could have been 11 cents, not 10 cents. They all are focused on the confusing "guidance" going forward because of the meet-up of Overture (OVER:Nasdaq - commentary - research) and Yahoo!, eloquently described by George Mannes Wednesday on TheStreet.com.
That, of course, is because the hedge funds want to know the next 78 cents of Yahoo!. The next $7.80, they are leaving to the bigger-picture boys.
I have never heard more of a contrast than I did last night between those who look at the next nanosecond of Yahoo! and those who are looking at the big picture. Not to praise either camp -- to get to where Yahoo! trades to $60, everything has to go right over the next year or two. But, and this is a huge but, everything has gone right over the last year under Terry Semel and Sue Decker, so maybe it still can.
Yahoo! is in an amazing position that few other companies are in: It literally can pick and choose among the highest-growth markets it wants to enter. Does it want to dominate sports? It can do that. Does it want to dominate business? It can do that. Entertainment? It can do that. It just depends on what the viewers and advertisers want. Yahoo! is like a cable network that can choose which areas it wants to highlight, and everyone else is so desperate to connect with Yahoo!'s growing audience that they will pay to play.
Think of it like this: Remember Cox (COX:NYSE - commentary - research) the other day trying to make it so it doesn't have to pay ESPN a couple of bucks per viewer? Well, Yahoo! is in the opposite position; it is getting people to pay it to run stuff with the hopes that Yahoo! will send a little traffic their way. That's a tremendous business model.
Here's some irony. This is the business model that AOL (AOL:NYSE - commentary - research) once aspired to have under Bob Pittman. But Pittman so extorted the providers that he almost wiped them out and the viewer experience wasn't as good as that on Yahoo!, plus he made you pay for it! Yahoo!'s free. AOL's model was short-term greedy, Yahoo!'s model was long-term greedy. The latter always wins.
So, let the hedge funds bicker over the "guidance." Stay focused on the business model that allows Yahoo! literally to coin money because no one, with the possible exception of Google, comes near it right now. Yahoo! is a cable monopoly without the infrastructure costs of the cable companies and without the payoffs necessary to keep a monopoly going because it has earned its monopoly.
Nice business.
Oh yeah, the hedgies say, but why didn't they do 11?
And people wonder why hedge funds underperform. "
(in www.realmoney.com)