Category Archives: Market News

Advertising, Business Strategy, Innovation, Internet, Market News, New Media, Online Marketing, Sales & Marketing

Yahoo Business Results and Comparison With Google

http://newsimg.bbc.co.uk/media/images/45177000/jpg/_45177445_45032921.jpgYahoo has reported a loss in the final three months of 2008 as the economic downturn hit sales of online ads.

It reported a loss of $303 million compared to a profit of $205 million last year.

The results come as Carol Bartz takes over from Jerry Yang as the firm’s new chief executive.

Some analysts feel Yahoo has weathered the downturn better than expected, with the loss mainly due to one-off costs.

We don’t think so. The downturn is far from over, and Yahoo will see a very aggressive Google in the coming months, because Google is also facing pressure on their revenues.

Yahoo has a similar global people reach as Google, of about 450 million people, or 30% of global Internet user base, but the lack of revenue producing assets makes the difference. Yahoo has no strong answer to Google Adwords even today after 3 years.

Yahoo does have a few strong assets:

  1. Yahoo Answers has been growing in popularity at an amazing rate, and how they monetize that traffic and user loyalty is to be seen. This is a big winner from Yahoo, where they have beaten Google.
  2. Yahoo Personals also has potential because online dating is a high growth business. Their pricing model needs tweaking because there are free sites like Plenty of Fish, that are equally good in quality of members.
  3. Yahoo Egroups and Flickr are also very popular destinations, and even if they can increase revenue by 1 dollar per user, it could a 100-200 million in new revenues.

But on the advertising side, Yahoo has difficult times ahead as Google continues to eat into its user base worldwide — both English and non-English. Their ad network doesn’t work anywhere near Google’s quality, and that explains the lower revenues.

Yahoo has to make some hard decisions on revenue generation and partnerships.

Related Articles:

http://news.bbc.co.uk/2/hi/business/7854887.stm

Capital Markets, Finance, Market News, MyOrbit Blogs, Risk Management

Goldman Sachs Reports First Quarterly Loss But Remains Strong

The unbeatable hero of Wall Street, Goldman Sachs, has reported its first ever quarterly loss since it went public 9 years ago. And yes, the market conditions are quite bad.

Goldman Sachs has posted a quarterly loss of $2.1 billion, or $4.97 per share, on net negative revenue $1.58 billion, down from a profit of $7.01 per share in the same quarter last year. Results for the entire year weren’t actually all that bad; the i-bank posted a profit of $2.3 billion, or $4.47 per share, on revenue of $22.2 billion.

Though some may say its down from an $11.6 billion profit last year, but if you see it with a “grounded perspective”, most of Goldman Sach’s competition is in tatters, or buried already.

To us, a surviving and standing Goldman Sachs represents strength. And they have managed to be significantly less exposed to much of the sub-prime crisis and its toxic derivatives.

More than that, Goldman Sachs has the belief to battle it out. If anyone on Wall Street can do it, it has to be Goldman Sachs. And at their current valuation, they are still a ‘buy’!

Jobs & Careers, Market News, People

Chicago Graduate School of Business: Gets Gift & Changes Name

With the worldwide economy looking a bit glum, it is expected that a record number of people will be try to head for various schools in the next 6 months, including one of the all time top b-schools: University of Chicago’s Graduate School of Business GSB.

But that school’s name is going to change.

The GSB announced on Nov 6th the receipt of a gift valued at $300 million from alumnus David Booth ’71. In appreciation, the university will rename the school to “The University of Chicago Booth School of Business.”

In an interview, Booth described the gift as “largely unrestricted.”

According to Chicago’s press release:

“The school plans to use the money for several new initiatives, including aggressively attracting and retaining star faculty. Other uses being considered include developing new faculty groups in academic areas not normally associated with business schools, expanding existing research centers, and launching ambitious programs to better leverage the school’s intellectual capital.

The gift may also be used to expand the school’s international presence beyond its existing campuses in London and Singapore.”

This also creates a new record for the largest gift to a b-school… breaking the previous record of $105 million given to Stanford GSB by Philip H. Knight in 2006.

Business Strategy, Capital Markets, Market News, MyOrbit Blogs, People

US and Global Financial Crisis – Views & Updates

Like most of you, we have been watching the developments for the last few weeks, as MyOrbit spans worldwide with a link into the global markets. This post puts our thoughts and updates for you.

Background:

Financial institutions have been struggling to meet the mandates of bad loans, and the global markets have been showing the effects.

Banks are allowed to lend about 10 times the capital they have on deposit (called CAR: capital adequacy ratio), but multiple banks seem to have not-confirmed to this requirement, and in effect lending much more than their safe limits. Losses on mortgage-related securities have depleted bank capital. Those securities had collapsed with falling home prices, along with increasing defaults and foreclosures.

Now the common annual-deadline-abiding taxpayer of the US will be paying for the lack of accountability by Wall Street Banks, and to an extent the Financial Heads in the US government.

While the US legislation passed a bailout package of $700 bn with good intentions (following great effort by Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke)…but the what, when, where, how- are still not clear.

If so much of US tax payer’s money has to be used to rescue poor performing banks…and there’s a reason why they are poor performing …because they gave $500k to $1 million mortagages to almost everyone who asked in 2005-2007 without much due diligence (we heard about NYC road-side pirated DVD sellers getting $500k mortgages!)

And the tax contribution from the people who received those bumper mortagages probably don’t add up more than a few billion dollars, which leaves the majority of common tax payers holding the $700 bn bill….for a lunch they never had!

Initially, the plan was to buy distressed securities of the banks to help clean-up the Balance sheets of the Banks– but that did not sound good. Why should the Govt buy toxic securities which will only cause loss and give nothing much in return?

Updates:

Henry Paulson’s earlier life as an investment banker is now playing a key role in how the bailout solution is shaping up.

Most Republicans and Democrats in the US legislation agree on taking equity stakes in financial institutions, because if government money is going to be used, taxpayers should at least get the chance eventually to profit from the investment.

So the US legislation is now following the approach used by European govts — and will fund the recapitalization. Thankfully, the focus of Paulson’s initial plan — of buying distressed mortgage-related securities to improve banks’ balance sheets and make it easier for them to lend again — is not being shifted to buying equity/holding position in the distressed banks and FIs.

The latest approach of buying equity stake in distressed banks and FIs is a much better option for the taxpayer funds. At least there is an upside if/when some of the distressed banks and FIs do well, the Govt would gain from appreciation of its equity stake. In that sense, the Govt is taking the role of a mega-investment-banker by underwrtiting the securities of these banks and FIs.

Advertising, Business Strategy, Innovation, Market News, MyOrbit Blogs, New Media

Success Story of Wall Street Journal Online

1 Comment

At one time, newspapers were incredibly influential in terms of their ability to shape opinion. This is not the case anymore. The main reason for this is the fact that online news sources are providing serious competition to the traditional print press. This has led to a significant decline in newspaper circulations.

However, a small number of print newspapers like the Wall Street Journal have not only survived the online storm; they have done extraordinarily well despite the competition. The newspaper still boasts two million readers a day. Even more impressive, however, is the fact that the paper has transitioned quite well into the online medium. Its online subscriber numbers are staggering as the paper has close to one million members. These are truly amazing numbers and it leads many people to wonder the secret of the Wall Street Journal’s success.

Part of the reason is that although the newspaper is named after a particular street in New York City, the subject matter of the paper is international in scope. There are financial markets all over the world. People involved in these markets require an influx of news on the subject of banking, finance, and the economy.

Whether it is the financial district of modern London or the black Wall Street of 1920’s Oklahoma, people all over the world have required financial news. The Wall Street Journal provided for that need. As a result, it has been reaping the rewards since its inception in an earlier century.

Of course, the ability for the Journal to stay relevant ties in with the foresight to create an online presence. This is no minor feat. Had it not effectively developed a credible online subscription service it would have lost ground to more visionary start ups. Yes, the Journal could have gotten into the game at a later date but this would have been seen as a “follow the leader” tactic and not one of innovation. The New York Times learned this lesson when its late start into online news subscription services never caught on.

How ahead of the game was the newspaper in this regard? Well, the website debuted in 1996. (URL: WallStreetJoural.com) The internet was making its first expansion into people’s homes during this time period. They were well ahead of the curve since it immediately jumped into the fray. Yes, several newspapers had websites but they were sparse and did not truly embody the look and feel of a new media dynamo. The Wall Street Journal Online did and it set the foundation for the future growth that it would soon experience.

Part of the reason for this is that they understood the trends media communications were being directed. Since the Wall Street Journal lived in a realm of dollars and cents, it understood that the future of news would be found in online subscriptions. Traditional newspapers were simply too mired in tradition to grasp this concept. As such, they fell behind while the Wall Street Journal embraced change and rode it to significant new media success.

This is an article written by one of our Wall Street experts of the Wall Street Gemzies page. This Gemzies page is an Online Wall Street Community where fellow experts can share, rate and find websites, videos photos, books and the latest news. We have got some great content on the Wall Street Bull, Black Wall Street and the Wall Street Journal. We invite you to join our Wall Street Gemzies. Article by Marcel_Van_Brienen.

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A few thoughts by MyOrbit: 

The  Wall Street Journal has maintained a prime position in the free market economy, and whether you agree with their views or differ, it is a fact that their view reaches a few million business/financial professionals, and hence has the ability to make tremendous positive or negative influence on any topic they touch.

That said, the online medium, including blogs and websites like ours, are playing an increasingly important role in providing the raw material/ stories that ultimately appear on the pages of Wall Street Journal. The advances in online media have made it possible to get noticed rapidly. For example, Many reporters regularly pick stories from the top social bookmarking sites like Digg and Stumble-Upon.

These are interesting times, and Wall Street Journal surely has made itself comfortable in the online space, which in way, ensures its survival and leadership position in the coming years.