Yahoo!’s (YHOO) Terry Semel says that his company is "fixed". By that he means that the overhaul of the company’s technology is done and its new advertising platform will begin to pay dividends later this year. According to Reuters: "I think you will really see these things come alive over the next year or two," he said.
Semel may have forgotten that Google (GOOG) owns half the search market. Or Microsoft which has both the capital and inclination to improve its own search and internet presence, is prepared to push further into that market.
Recapturing growth is a bit like putting a ship in a bottle. It is hard to do and rarely works. Yahoo!’s quarterly revenue growth rate started 2006 at 39%. It dropped to 34% in Q2 and 26% in Q3. The fourth quarter was its slowest at 19%. The company forecasts even slower growth in 2007.
Today, Semel has the Wall St. gods on his side, but that is often temporary. His stock is up almost 20% this year. But over the last two years it is still down while Google (GOOG) is up almost 150%.
The forces from on high are fickle. Last year, Semel was the goat.
As they used to tell Roman generals, "Remember, Thou art mortal."
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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