Do you Yahoo!?
Yahoo! (YHOO) is implementing a new ad platform with an updated ad ranking model. Historically, Yahoo!’s search ads have been ranked solely by bid price; the higher the bid, the higher the ad ranks. Over the course of this year, Yahoo! will implement what it calls a “quality-based ranking model,” where along with the bid price, the ad’s rank on the search results page is influenced by how the ad performs ? such as its click-through rate (CTR) and potentially other factors. This system is similar to Google AdWords, which ranks sponsored links by factoring in both bid price and CTR. The ad platform itself will include enhanced geographic targeting capabilities, as well as the possibility for demographic and behavioral targeting.
This ranking model will enable Yahoo to charge a higher bid for high CTR, thereby bringing in higher ad revenue a la Google. Additionally, Yahoo’s new partnership with eBay and the success of Yahoo Japan lead me to believe that Yahoo’s laggard stock price is primed for growth. At current prices, Yahoo cannot possible get any cheaper. I recommend a buy on Yahoo!.
– Faisal Laljee
YEa, i looked at Yahoo as a value play, thinking the low end of the 2 year chart, and the fact the franchise seems well run. But whats caught my eye is the the leading enginee in CHina has a market cap of only $2 Billion. i dont neccarily like ” Baidu” but who ever controls 50% of the market with 1/4 of worlds population, it seems at $2 billion your paying less then $2 per person. it seems who ever controls this market the stock would be worth somethnhg more like $10 billion.
And the thing is the CHinese goverment seems to road block Google and yahoo who have small market shares, recently the Google site was shut down for 2 weeks, all that traffic must have
went to Baidu and similiars.
You bring up a great point. The question is – do the folks in China have the buying power of American’s? I mean Google drives off Ad Revenues. Companies are bidding up spots on Google because they have a good ROI – meaning customers are clicking and acting upon these sponsored ads. I would love to know how the Chinese population compares in terms of wealth, and how they respond to advertising. How much is Cathay Pacific paying for ads on Baidu versus United on Google or Yahoo?
I think though that you may be on to something certainly worth looking. Meanwhile, I like Yahoo because it is finally taking on Google (not by opening opportunities but by following Google). The new ad model and publisher site rivals Google’s own and Yahoo die hard fans will prob welcome this as an excuse to stay with Yahoo.
– Faisal Laljee
My best estimates are
The Chinese Economy is estimated at $800 Billion
vs. the world Ecomony
of $50 Trillion. and US
ecomony of $10-$20 Trillion.
Biadu relative to a Rediff,
no comparision.
It looks like Baidu has
about the same price to sales
ratio on last quarter as Google.
But the CHinese paid search market is only $160 million vs.
the population of 1.4 Billion,
so that “something extra” would be richer sequentials for many quarters. Baidu has already promised 40% sequentials on revnue for the
June 2006 quarter. Google’s are running around 15-18%.
Where are you getting your numbers? I am not questioning them, but I would like to read what you are reading on this one. I admit I am not quite as well versed in Baidu as you are.
– Faisal Laljee
I tend to be very curious
and read up aggressively
to cover all the bases.
Espically if there is
special inspirtation
such as in isrg-lifc.
Baidu? they did about
$17 million last quarter
and promised $23-$24 million
this quarter in the press release, thus the price to sales
ratio is close to google’s.
Chinese economy size from basic ecomonic internet articles. Chinese paid search size a recent a CBS market watch
article. i just go to Google
and start digging on news and web and iam exhausted. On saturday i combed through 20 google search pages on Lifecell
to find that Australia offerred them $50 million to setup R&D lab back in 2003.
If your time is limited in looking slightly beyond Yahoo’s
value aspect, i sugguest digging on Baidu over a
marginalized Rediff. And the more you dig, youd be surprised
at how much the Chinese goverment doesnt want Google-yahoo around, thus Baidu with
43% leading marekt share has 50 mph winds propelling its sails!
again, its not about “liking” baidu, but more about who ever owns 50% of Chinese search market, well thats
worth way more then $2 billion.
Yes – what you are saying makes a lot of sense. I will look at it more closely and perhaps post my thoughts on Baidu under its own headline
if time permits, include investigating for information
as to why the country’s
most infulential hedge fund,
the one thats responsable for 42-5% of daily volume on all the exchanges, and known to operate as “hard core information sharks” why have they bought up 20% of Baidu? mr. cohen/ SA capital.
got this off yahoo/briefing.com
BAIDU
…………………..
New York Global Securities noted they have had discussions with four of Baidu’s (BIDU +.1%) largest distributors, who told the firm they are enjoying healthy q/q rev growth due to continued success of BIDU’s search engine. Firm’s analysis of the sales numbers the co’s distributors provided to them indicates that BIDU’s top-line growth in 2Q06, 3Q06, and 4Q06 will exceed consensus ests by 15%, 23% and 25%, respectively; firm raised their rev ests to reflect this. However, they say the bad news is that there continues to be significant conflict between the distributor base and Baidu’s own direct salespeople. They also said there is growing-albeit still relatively small-competition from Yahoo (YHOO -.13%) and Google (GOOG -.47%). Firm believes these two forces are causing an increase in price discounting that will, in time, result in lower revenue growth for BIDU. Firm thinks the BIDU story remains positive in the near term, but expects the disarray in the sales channel to impact top-line growth.
………………………
this is earthy and ego, dangerously seductive story,
approach without desire.