Stocks: (GOOG)(YHOO)
Yahoo! was passed by Google in terms of unique visitors in November. Google had 475.7 compared to 475.3 for Yahoo!. All of Microsoft’s sites stayed in first place with 501.7 million according to ComScore and Bloomberg. Google grew faster than the other two companies.
But, Yahoo! currently viewed as the loser in the internet derby, may actually be gaining a valuation advantage. Users are at least one fairly good metric of value. It certainly used in TV, radio, magazines and newspaper.
Cable systems are often valued at dollars per subscriber.
If there is any logic to unique visitors having a discrete value, then either Google is overvalued or Yahoo! is undervalued. Google’s market value is $140 billion. Yahoo!’s is $35 billion. But, each has about the some number of unique visitors.
The two companies obviously have different growth rates and expense bases. The Google model is clearly preferred by Wall St., But, perhaps, by too large a margin.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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