Incêndios: Governo declara situação de alerta a partir de domingo

[Ulisses Pereira]

"Disney, Viacom Lose to Google, Yahoo!"

By James J. Cramer
RealMoney.com Columnist
9/28/2004 2:15 PM EDT


"Disney (DIS:NYSE - commentary - research) and Viacom (VIA.B:NYSE - commentary - research) keep going down. Google (GOOG:Nasdaq - commentary - research) and Yahoo! (YHOO:Nasdaq - commentary - research) keep going up. Disney and Viacom are worth $46 billion and $56 billion, respectively. Google logs in at $33 billion and Yahoo! at $44 billion.

Which are right? Which valuations are going to stand and which are going to fall?

In the end, the market knows only how to value for growth. Viacom's not going to get taken over. Disney already wrecked its takeover chances. Google has two different classes of stock, so there's no takeover there. Yahoo!'s too big to be taken over by almost anyone. So we come back to growth.

I know, I know, that's not fair. Disney's got that incredible film library. Those beautiful theme parks. ABC. ESPN! Viacom's got CBS and Nickelodeon and MTV and all of those radio stations.

But Yahoo! and Google have growth, and they have it as far as the eye can see. And they have Net presence, something that Disney and Viacom have ceded to others or have no desire to have themselves.

Disney and Viacom have tons of infrastructure. Google and Yahoo! have machines. Disney and Viacom have tons of intellectual property. Google and Yahoo! have none; others make it for them and are so thrilled to be part of their pipe that they, at times, have paid up to do content for them.

I could tell you that Google and Yahoo! could have sales rise 50% in the next five years and you would agree. You would laugh at me if I said the same thing about Disney and Viacom.

So, my conclusion? If I were a momentum fund, I would say that Disney and Viacom are overvalued, useless, has-beens. Google and Yahoo!? I don't care what price I will have to pay; I will be right in the end.

So, Disney and Viacom are wrong, and Google and Yahoo! are right.

Which is why this market drives so many rational people bonkers and is best handled by someone with no institutional memory and who is 27 years old.

Thank heavens I can still think like those people. "

(in www.realmoney.com)