In my two and one-half years covering
I've barely written or spoken an unkind word about the world's dominant Web media company. A small exception has been to point out, accurately, that it's almost a sure thing Yahoo!'s stock will trade down dramatically after the euphoria of its quarterly earnings report wears off.
Sure, I knew a couple of years ago that Santa Clara, Calif.-based Yahoo!'s earnings were coming more from interest on its IPO cash than from operations, that its valuation was (and is) wildly overinflated by traditional measures and that its frequent splits aren't relevant to its value.
But an abiding faith in the company's professionalism,
margins and laser focus on being a new-media powerhouse kept me from suggesting that its stock was anything other than a keeper.
It should come as no surprise, then, that I view most of the criticism over Yahoo!'s three-hour, sabotage-induced
outage Monday as a bunch of hooey. The whining over a deliberate attack on Yahoo!'s servers -- to which Yahoo! responded quickly and creatively -- reminds me of a cover story in
The New Republic
a decade ago. The piece was written by the late great Henry Fairlie and titled "Fear of Living."
The author meticulously argued that modern people, especially Americans, had become so accustomed to their physical worlds operating according to plan that they had developed unrealistic and unhealthy expectations regarding technology. Planes never should crash, cars shouldn't malfunction and doctors always should save the patient, according to the ethos Fairlie described -- and deplored.
This leads me to Yahoo!'s outage, a relatively brief business interruption in which nobody died, no physical property was damaged and little, if any, money was lost. Business disasters of an earlier era -- steel-mill accidents, oil-rig explosions and railway collisions -- killed employees and customers alike. Still do.
"Technology companies periodically suffer from technology 'mishaps,'" notes analyst Lise Buyer, an unabashed Yahoo! supporter with
Credit Suisse First Boston
(not a Yahoo! banker), in a note to clients Tuesday morning. "Whether a bug in a software package, a hardware issue, a cut phone line or a server outage, problems arise. Technology investors know this. What matters most is how management rises to the challenge, and, 1) solves the problem, and, 2) conveys the issues at hand to investors." Buyer rates Yahoo!, appropriately, a buy.
Tech-stock investing, even more than living, is risky. Anyone seduced by the easy gains of recent years into thinking there will be neither technological nor market disruptions is kidding themselves.
What's more, Yahoo! faces plenty of risks, most importantly aggressive competitors like
, Microsoft and even one of its own key technology vendors,
, which is snapping up streaming technology provider
, a company Yahoo! shoulda, woulda, coulda owned.
The risk that Yahoo! will crack because of lousy technology, however, is more than a little silly.
Adam Lashinsky's column appears Tuesdays, Wednesdays and Fridays. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. Lashinsky writes a column for Fortune called the Wired Investor, and is a frequent commentator on public radio's Marketplace program. He welcomes your feedback at