The number of Internet users on Yahoo!(YHOO) sites (Yahoo! News, Yahoo! Finance, Yahoo! Sports, and Yahoo! Answers) has increased at an annual growth rate of close to 10%, from 430 million in 2005 to around 590 million in 2009. We expect this growth to continue, and Yahoo! Internet users count to reach 770 million by the end of Trefis forecast period.
Trefis members have created forecasts for two key drivers of Yahoo!'s stock over the last week: (1) Internet Users on Yahoo! and (2) Searches Per Internet User. The member forecasts suggest that Internet Users on Yahoo! will trend above, while Searches Per Internet User will trend in-line with estimates of the in-house team of analysts at Trefis. These member projections indicate a small upside to Yahoo!'s stock. Yahoo! competes with Google(GOOG), AOL(AOL) and Microsoft(MSFT) in the search advertising and display advertising businesses. We currently have a Trefis price estimate of $19 for Yahoo!'s stock, about 38% above the current market price of close to $14. We estimate Search Advertising and Display Advertising constitute around 21% and 19%, respectively, of the $19 Trefis price estimate for Yahoo!'s stock. Hence the stock is quite sensitive to (1) Internet Users on Yahoo! and (2) Searches Per Internet User. Below are charts showing recent estimates created by Trefis members for the two drivers in detail.1. Internet Users on Yahoo!
The average of Trefis member forecasts for Internet Users on Yahoo! indicate an increase from around 620 million in 2010 to around 799 million by the end of the Trefis forecast period, compared to the baseline Trefis estimate of an increase from 620 million in 2010 to around 769 million by the end of the Trefis forecast period. The member estimates imply an upside of 1% to the Trefis price estimate for Yahoo!'s stock. In the past, the number of Internet Users on Yahoo! has increased from 338 million in 2003 to 590 million in 2009. Disagree? You can drag the forecast trend-line above to express your own view, and see the sensitivity of Yahoo!'s stock to Internet Users on Yahoo!. Our complete analysis for Internet Users on Yahoo! is here.2. Searches Per Internet User
The average of Trefis member forecasts for Searches Per Internet User indicate an increase from 35 per month in 2010 to around 49 per month by the end of the Trefis forecast period, in line with the Trefis estimates. In the past, Searches Per Internet User has increased from 10.5 per month in 2003 to around 33 per month in 2009. Disagree? You can drag the forecast trend-line above to express your own view, and see the sensitivity of Yahoo!'s stock to Searches Per Internet User. Our complete analysis for Yahoo!'s stock is here.TheStreet Premium Services
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