Stream of consciousness time:
At the end of every day you need to always check this out
Sure, Google seems like a dream now - but do you remember the Bubble years
What value did Yahoo! have for 475 dollars a share in January 2000?
Let’s see…
YAHOO! REPORTS FIRST QUARTER 2000 FINANCIAL RESULTS
SANTA CLARA, Calif. — April 5, 2000 – Yahoo! Inc. (NasdaqNM:YHOO - news) today reported net revenues totaling $228,384,000 for the first quarter ended March 31, 2000, compared to net revenues of $103,878,000 for the first quarter of 1999, an increase of 120 percent. Pro forma net income for the quarter was $63,251,000 or $0.10 per share diluted, excluding acquisition-related charges, employer payroll taxes on gains realized by employees from non-qualified stock option exercises, and a gain from the exchange of certain equity investments. This compares to pro forma net income of $17,734,000 or $0.03 per share diluted for the comparable period in the previous year, excluding acquisition-related charges. Including acquisition-related charges, employer payroll taxes on non-qualified options, and a $40,656,000 gain from the exchange of the equity investments, net income for the first quarter ended March 31, 2000 was $77,851,000 or $0.13 per share diluted, compared to net income of $1,796,000 or $0.00 per share diluted reported in the comparable period of the previous year.
“Our results in the first quarter continue to demonstrate that we have created a global service that resonates with users and a business with inherent self-reinforcing scale from which strong financial results can be derived,” said Tim Koogle, chairman and CEO of Yahoo!. “We intend to leverage our powerful platform and aggressively extend our position as much as possible on all fronts as we go forward.”
http://docs.yahoo.com/docs/pr/1q00pr.html
OK -
Flash-forward to 2007
Put up or shut up time for Yahoo!
After a rough 2006, Yahoo must reassure Wall Street that new search tool Panama will be a success and that it has a plan to compete with Google and MySpace.
http://money.cnn.com/2007/01/19/news/companies/yahoo_earnings/index.htm
Sure this is business and anything can happen, but roughly running the numbers, Yahoo! is now worth less than 10% of its value 7 years ago, having been crushed by Google. This isn’t to say that Yahoo! can’t come back - I hope they do - we always need a competitive marketplace.
So what was Google’s “killer app” that converted millions of users?
Free email/Gmail? No way - if that were the case then Windows Live and HoTMaiL would be ruling the world…
Search quality? Maybe - Yahoo’s was good then and is outstanding now.
The answer =
An AdWords history lesson
Four score and thousands of advertisers ago, Google engineers brought forth on this continent a new form of advertising, conceived in relevance and dedicated to the proposition that all advertisers should have access to an effective marketing channel.
We recently sat down with Ross K., one of the original AdWords engineers, and got a little history lesson…
Before the fall of 2000, Google offered advertising through Premium Sponsorships, but there was no way for advertisers to set up campaigns for themselves. As we’re often prone to do, we ran a limited test, showing a little link that said “see your ad here” to a small percentage of Google users.
After the link went live, we eagerly waited for the first advertiser to sign up. A few engineers kept checking the system, and within minutes, our first AdWords customer had created the very first ad through online sign up. They were a small business that sold live mail order lobsters. Less than half an hour from the time the link went up, their ad was live on Google! These guys had never considered using online marketing before, but saw our test link and signed up when they realized they could just do it themselves right then and there.
Today, of course, you can still find mail-order lobsters on Google, in addition to tarragon, garlic, and black peppercorn. And if we’ve made you hungry, the rest of the lobster bisque recipe is here.
http://adwords.blogspot.com/2005/08/adwords-history-lesson.html
Let’s look at this “new form of advertising, conceived in relevance and dedicated to the proposition that all advertisers should have access to an effective marketing channel” - sure this all sounds good and fair in principle - but something tells me that when I go look for a new DVD player that WalMart or Circuit City is going to be dominating my sponsored (and perhaps organic) results - not Bill’s Electronic Emporium down on Church Street.
This is because of two factors:
1 - WalMart or Circuit City can afford $5 a click-thru - Bill’s son is a sophomore in college, he still has 6 years left on his mortgage and a big alimony payment to deal with. $5 a click would put Bill under in a day. The big boys just write it off and laugh.
2 - Google nor Yahoo! has Local Search done correctly. Google is scrambling in the right direction, but it’s still no match for highly informational local websites that personally interact with store owners, Chinese restaurants, Salons, Wine shops and the guy who you need to come fix your busted window. This is the next threshold of search which is the real goldmine.
As for me, I’m working on Local Search…InsidePasadena.com is an example of the direction of what Local Search will need to boil down to - “micro-Googles” in essence that cover one town or area with in-depth content. Remember all you SEO and marketing folks - people LOVE content - they do NOT LOVE just a page of phone numbers. And why stop there? Why not a “Shopping only” Local Search website. I’ve got one of those in the works too…
If given a choice between a nice 2 or 3 page long listing which shows me the inside of the restaurant, the view, the menu, hours and testimonials - or the Sports store that’s been in the center of town for 30 years with photos of new equipment, sales and specials - I’ll go Local. My local economy will improve - not Google’s stockholder’s portfolios.
And don’t get me started on CitySearch.
