"Business Week": Yahoo search business will be expected to achieve "high growth"

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Introduction: "Business Weekly" website published an analysis of the article pointed out that Yahoo's own search engine technology will certainly pose a huge challenge to Google, and Yahoo's huge user base will also contribute to this. From this point of view, Yahoo's current share price does not appear to be high.

Yahoo's April 1 share price of $49 per share, its P/E ratio reached 92 times times higher. But analysts say the company's current share price is somewhat inflated, given the potential growth of the online advertising business associated with the search business. "Yahoo will have huge growth potential in the search business," said Scott Kessler, an analyst at the S & P. ”

Over the past few years, Yahoo has overlooked the huge business opportunities of the search business. With the rise of Google, the ratio of business traffic using Yahoo Search online fell from 56% in 2000 to 28% at the beginning of 2004 years, according to WebSideStory, a market-research firm. However, Yahoo has attracted enough attention. It spent 2 billion dollars last year merging Google's rivals Overture and Inktomi two companies, and then successfully integrated the two search technologies into its original technology.

February 17 this year, Yahoo officially launched its own search technology. By March 26, Yahoo has again invested 550 million of dollars to Kelkoo Europe's companies. In the coming months, Yahoo will also provide personalized search services for its 130 million registered users. "This is the best search service we've provided so far," said Jeff Weiner, senior vice president of the search business in Yahoo. ”

Analysts said that, although Google announced on March 31 that it would provide its users with a large capacity free e-mail message, the purpose is to compete with Yahoo and Microsoft MSN Business, but specifically to the search business itself, Yahoo still has many inherent advantages that Google does not have. The reason is that Yahoo as a portal, its non-search business traffic is very high, which provides it to revitalize the search business has laid a solid user base.

Yahoo's monthly visit is 60% higher than Google's, according to Nielsen/netratings's statistics. That is to say, many Google search users are also Yahoo visitors, once the Yahoo has strengthened its search technology, this part of the "lost" to Google where the old users are very likely to return to the ranks of Yahoo search. This will also help the future of Yahoo's search business, given the high level of loyalty of most users.

By comparison, Google's relationship with its users is less intimate than Yahoo's. Its Gmail free email service is still in beta, and it will not be launched until a few weeks or months from now. Again, Yahoo has a lot of advantages over its advertisers, compared to Google. Due to occupy the advantages of the portal network, large online advertisers are generally more optimistic about Yahoo.

Of course this does not have any pressure on Yahoo's search business. First, Microsoft is trying to integrate search technology into its Windows operating system. If Microsoft's plan turns out to be a reality, with Windows's dominance in the PC arena, Microsoft's search technology will be the first choice for many users to search in the future. It's not hard to imagine that if Windows users could use Microsoft's search technology like Word and outlook, it would be hard for both Google and Yahoo to compete with Microsoft.

Second, Yahoo must also come up with a "paid search results" feasible solution, lest give their search business put too much emphasis on commercial profits hat. The so-called "paid search results" means that some commercial websites pay Yahoo some fees, and then Yahoo's search engine will add these commercial sites to the search results. In February this year, Yahoo said it tended to support "paid search results", but it sparked heated debate in the industry. Google, on the other hand, has consistently objected to this approach, saying it would compromise search users ' trust in search results.

However, as long as Yahoo is not too keen on the "paid search results" approach, its search business will put a huge strain on competitors, including Google. From this point of view, Yahoo's current share price does not appear to be somewhat inflated.