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Yahoo Misses Earnings Target, Creating Concerns About Google

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intelliot
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PostPosted: Wed Jan 18, 2006 4:26 pm    Post subject: Yahoo Misses Earnings Target, Creating Concerns About Google Reply with quote
Today, investors complained about the fact that Yahoo Inc. missed analysts' fourth-quarter earnings target. There could be similar backlash if Google Inc. doesn't meet Wall Street's high expectations.

Yahoo's results provide a clue about Google because the two competitors run the Internet's two largest advertising networks: Google AdWords/AdSense and Yaho Overture/Publisher Network.

As advertisers put more money online, the earnings expectations have been steadily rising. Yahoo doubled its fourth-quarter profit to $683 million, but its earnings per share fell a penny below analysts' estimates. Analysts worry that Google will also disappoint investors when it releases its results Jan. 31.

"I don't think the expectations for Yahoo were out of hand, but I think they may be for Google," Citigroup analyst Mark Mahaney said.

A 31% increase in Yahoo's 4th-quarter earnings per share was forecast. Google' stock has soared so high so fast that the slightest stumble could provoke massive selling.

Google reported a stellar 3rd-quarter performance in late October, after which its stock price has climbed nearly 50%. Yahoo's stock price increased 19%.

I think we should watch Google's stock come Jan. 31. There's a good chance it could shake dramatically, whether up or down: based on the release of earnings numbers, people will make decisions about buying or selling the stock.

Through November, Google already held a substantial lead over Yahoo in the Internet search engine market, according to two major measurement firms. ComScore Media Metrix pegged Google's U.S. market share at 39.7 percent and Yahoo's at 29.5 percent. Nielsen/NetRatings estimates Google's U.S. market share at 46.3 percent and Yahoo's at 23.4 percent. In other words, all estimates show that Google has higher market share.

Since neither company has released December numbers yet, analysts wonder if Google widened its lead more during the final weeks of the holiday shopping season – a time when advertisers figured to be spending heavily.
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PostPosted: Sun Jan 22, 2006 9:11 am    Post subject: Reply with quote
Google stock had its largest one day loss recently over concerns about the advertising revenue and also the subpoena business.
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