2HRS2GO: Yahoo ad concerns get monotonous

3 min read

COMMENTARY -- Enough about Yahoo (Nasdaq: YHOO) and online advertising.

After all the warnings in recent months, you could have reasonably assumed that there is nothing left to say about Yahoo!'s reliance on ads. Apparently some analysts don't think so.

Andrea Williams Rice of Deutsche Banc Alex.Brown and Lowell Singer of Robertson Stephens whacked Yahoo! today. On the same concerns.

"We believe that there is less visibility into Yahoo's advertising business, which generates more than 80 percent of the company's revenue," Singer wrote.

Rice and Singer surely know that Yahoo has already fallen more than 85 percent from its 52-week high:

Perhaps they're just telling us not to hunt for a YHOO bargain yet. Might be sound advice, but WE ALREADY GOT THE PICTURE.

Give investors some credit.

People started rumbling in the early summer about the Web portal's revenue base. Merrill Lynch sounded a note of caution in August. Lehman Bros. issued a YHOO downgrade a week later. Other analysts followed.

Research firms conducted another carpet bombing run on Yahoo! last week.

That's five months of angst about ads online. The sector has already been pummeled.

So what more is there to mention? What value do worrisome reports add at this point?

Evidently very little, judging by the minimal impact on the stock price of Yahoo today. Shares were slightly below the water line as of early afternoon, but at one point they were higher for the trading session.

Singer and Rice might have waited a little longer to release their reports, since all the available data has been analyzed. And analyzed. And analyzed.

Heck, even waiting a day would have helped to gain more insight into the online ad field, because Doubleclick (Nasdaq: DCLK) has a guidance conference call scheduled for this afternoon.

You could argue that Yahoo remains overvalued at its current level. The stock currently trades at almost 61 times estimated earnings for the next 12 months.

But by any traditional measure, Yahoo has been riotously expensive practically since the day it went public. Its valuation is even less of a new story than its advertising issues.

All this bandwagon hopping adds more fuel to the argument that the vast majority of analyst research is of questionable worth, at best.

There are gems here and there, to be sure. And sometimes there simply is nothing new to say.

If that's the case, at least be imaginative about it.

CNNfn recently pointed out that CS First Boston's Jaime Kiggen did temp work at Amazon.com (Nasdaq: AMZN) for a week to get a feel for the e-tailer's progress this holiday season. Now that's doing your legwork.

Not that I'm expecting analysts to grind it out that way. You certainly can't sneak into Yahoo and get a job stacking boxes. And there are limits to the amount of color that belongs in a report -- I can't imagine many people would want to read a brokerage report dressed up as an epic poem or a rock song.

Still, it would be nice for analysts to get a little more creative in how they gather information. Instead, almost everyone is using the same numbers to write the same reports read by all the same people. 22GO

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