eMailbag: Yahoo, Yet Another High, Netscape, Yet Another Low

First reader up this week asks:


“How much do you think Yahoo! will fluctuate on the price within
the next 3 months. Today it jumped $6 1/16 to close at 103 7/8? WOW!”



Reply: Trying to predict how much Yahoo! (NASDAQ:YHOO) shares may
fluctuate over the next three months is like trying to predict the weather:
sunny, stormy, and anything in between (although mostly sunny past six
months). Better luck predicting El Nino. At more than 40x sales
someone’s got to at least launch a weather balloon here and check that
Yahoo! air up there.


We like Yahoo! the company but can’t say YHOO the stock is an amenable item
to us at this time at current valuation levels. As others have said but we
disagree, we don’t believe in “content” that a winner takes all.


We believe four to five brands and various content services may survive and
even thrive. Look at ABC, NBC, and CBS, and throw in Fox also for a perfect
example of how this works. They each “win” in certain areas but not all.
Similarly, Yahoo! wins in content but not search–it’s not even a search
engine but a directory.


At more than $5 billion (fully diluted) market capitalization
we think YHOO may have gotten so ahead of itself that it might have to
acquire Microsoft to deliver the kind of expectations built into the stock.
How’s that? Not saying it won’t continue to climb but . . .


Not The Vocal Type


“I’m not usually in the habit of giving out feedback, but I have to depart
from my usual practice to say: You guys do an outstanding job.”


Reply: We had a temporary lapse of modesty as your e-mail found its
way to this page. We thank you.


ISDEX Mutual Fund?


“Is there a company that offers an ISDEX mutual fund? If you know of
any, I’d really appreciate knowing who it is.”


Reply: Since we get numerous requests every day about this we are
very tempted to create a guest book where everyone who wants an ISDEX
mutual fund can log a vote. Then we’ll take this to Fidelity or Morningstar
or Vanguard. Or, if they realize the huge impact the Internet is having on
Wall Street and Main Street they can call us.


Netscape Or Wetscape


“Netscape (NASDAQ:NSCP) announced a few days ago a strategic change in
its business direction. Since then the stock moved from 19.5 to 17. What do
you think about NSCP?”


Reply: Which of the strategic shifts was this one? They seem to be
coming by the hour.


We think Netscape’s role as developer and meta Web site is valuable. On the
enterprise front we think it’s got a real battle in a big stakes game.
Browser share is still considerable and Netscape.com garners the number two
slot in monthly users.


Long term we see Microsoft free to absorb or duplicate anything any firm
comes up with, and fuse it right into the “operating system,” which will be
two parts–client and server. Windows 99 or 2000. Without the OS leverage
anybody would have a chance.


But the real OS of the future, as we’ve said before, may be any and all Web
navigation sites, in particular everybody’s Web sites all taken as one huge
network of links and services. These combined are the new “operating system.”

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