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2HRS2GO: Maybe Yahoo can stem the tide

    Yahoo! (Nasdaq: YHOO), save us.

    The leading Web portal is scheduled to report first quarter earnings tomorrow after the closing bell. Shares of Yahoo! already lost 27 percent of their value over the past week, so the company could use some good news.

    Obviously, so could tech and Internet stocks in general -- anything to stop the flood. And there's nothing like a bellwether to carry the burden.



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    Since Web companies started going public, Yahoo! has never disappointed. The company never misses estimates (at least not the published consensus figures), its operations have been profitable for the last 11 quarters if you exclude one-time events and amortization, and traffic and revenue continue to grow at a healthy rate.

    First Call's published consensus predicts a first quarter profit of 9 cents per share for Yahoo!'s March quarter, excluding goodwill writedowns. For whatever it's worth, WhisperNumber.com says Wall Street's real expectation also looks for 9 cents per share.

    If WhisperNumber's chart is correct, Yahoo! shares have tracked expectations almost exactly -- the stock price rises immediately if the company tops the whispers and falls at once if the company merely meets or misses. The website says its statistics indicate almost an exact parallel: companies that exceed the whisper rise 74 percent of the time; companies that miss fall 74 percent of the time.

    In any case, Yahoo! remains the supreme Web content stock. If it's doing alright, then at least the overall sector might retain some appeal.

    Or maybe not. Yahoo! could expose the rest of the pack's weaknesses. There's only room for a few at the top of the Web heap, and America Online (NYSE: AOL) and Microsoft (Nasdaq: MSFT) seem to have a lock on a pair of spots. You could say Lycos (Nasdaq: LCOS) is in there, but it doesn't seem to be able to command anywhere near Yahoo!'s advertising rates -- Lycos' dollars-per-unique-visitor is scarcely half of Yahoo!'s, based on revenue from the latest quarters reported.

    But I wouldn't expect anything bad out of Yahoo!'s report. Everyone already knows it's way ahead of most competition and has been for a long time.

    It might not matter anyway. Maybe by tomorrow the Nasdaq will be rebounding; already, it seems to be climbing as this being typed in the early East Coast afternoon. But in case it doesn't hold, Yahoo! presents the best firewall yet.

    Other issues:

  • BindView Development
  • (Nasdaq: BVEW) The company's security and system risk management software got some attention during the rash of Denial-of-Service attacks last month, but increased attention hasn't helped sales much so far. The market flayed shares of BindView today after the company warned of disappointing first quarter results.

    Company executives blamed longer sales cycles, caused by the introduction of two new product lines. Isn't that something you factor in when you roll out new suites? It's not as if there aren't precedents for this -- every major enterprise software vendor can tell you new products take longer to evaluate.

  • Fairchild Semiconductor
  • (NYSE: FCS) How cold is the tech market? Not even an upbeat revenue outlook and a slot on the supposedly more stable Big Board can keep Fairchild from losing at least a little bit of ground today. It's not like there are tons of profits to cash in: FCS shares have been falling for a week, and remain far below their peak in early March. 22GO >