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Dow Jones S&P 500 NASDAQ 10-Year Note
10,328.89 1,102.47 2,211.69 35.46
Oil *
73.88
UP
20.63
UP
6.40
UP
31.64
UP
0.59
10 Yr
3.55%
SPDR Gold
108.95
+0.20%
+0.58%
+1.45%
+1.69%
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Dow Jones S&P 500 NASDAQ 10-Year Note
10,328.89 1,102.47 2,211.69 35.46
Oil *
73.88
UP
20.63
UP
6.40
UP
31.64
UP
0.59
10 Yr
3.55%
SPDR Gold
108.95
+0.20%
+0.58%
+1.45%
+1.69%
Data delayed 20 minutes

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Commentary: Wrong! Rear Echelon Revelations
*New* Alerts! Please click here...

Assessing Yahoo!'s Options
By James J. Cramer

3/8/01 8:11 AM ET


Read More
Click here for the latest from James J. Cramer.

Oh, no, Yahoo! (YHOO:Nasdaq - news - boards), it looks like we have another not-so-fast-growing media property on our hands. I am struck by how quickly Yahoo! became another slow-growing company in a sea of slow growers, buoyed only by buybacks and takeover bait, and not earnings-per-share growth, or lack thereof.

Holy moly, wasn't it just a little while ago that we thought we had the next Microsoft (MSFT:Nasdaq - news - boards) on our hands with a business model that seemed like television with a fraction of the costs and companies willing to pay it for distribution.

Yahoo! Yikes!
Skittish Analysts Slash Yahoo!
At Yahoo!, No Profits and No Visibility
Commentary
Eavis: Dour Forecast Makes Yahoo! Pricey Even Now
Seymour: Yahoo!'s Koogle Bumping Himself Upstairs
Williams: How Long Can Yahoo! Hang On to a Room of Its Own?

Where did it go wrong? Actually, nowhere.

Yahoo! grew to the sky and when it got there it became another media tree with lower advertising billings and no subscription fees. Sure, it had providers paying it to index deals and that's a terrific business. But there are only so many entities that will pay Yahoo! for traffic to their sites.

So now what happens? Here's a couple of scenarios:

  1. Some forward media company that wants to own one of two networks (betting that things won't always be this bad -- and they are awful) buys the company.

  2. Yahoo! cuts costs and finds a way to bring more of that revenue to the bottom line. Its production costs should be minimal, given that everybody supplies them with content.

  3. In the post-Napster world where not everything is free on the Web, Yahoo! finds a way to charge for something (if it can find something that is proprietary enough).

  4. Yahoo! becomes somehow less generic, less of a hodgepodge of everybody else's stuff and creates an identity that is not an amalgam of other identities that people want to seek out. I have no idea how it can do that.

  5. Yahoo! buys someone else and reinvents itself around other income streams.

No matter what happens, this is no Amazon (AMZN:Nasdaq - news - boards). It has no debt. It has a great balance sheet. It can reinvent itself because it has so much money. But the heady growth is now over until it does one of the above. Otherwise, this stock languishes. Period. Next!

James J. Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column to jjcletters@thestreet.com.
Send letters to the editor to letters@realmoney.com.
Read our conflicts and disclosure policy.
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Sorry, the page you requested could not be found

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Dow Jones S&P 500 NASDAQ 10-Year Note
10,328.89 1,102.47 2,211.69 35.46
Oil *
73.88
UP
20.63
UP
6.40
UP
31.64
UP
0.59
10 Yr
3.55%
SPDR Gold
108.95
+0.20%
+0.58%
+1.45%
+1.69%
Data delayed 20 minutes

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Latest Headlines