I was talking to my friend Mark about Yahoo! recently and he said something like "as long as they maintain their audience, I think they’ll be in good shape".

The same point was made by Randy Befumo of Legg Mason, in today’s New York Times in the piece about Yahoo! being a "value stock":

“If you have a traffic problem, then you have a fundamental business
problem because you have nothing to convert into revenue dollars,” he
said. “But if you have a monetization problem, which is what Yahoo
effectively has, you always have options.”

So I went and ran some charts on Comscore. Here they are.



What these two charts show is that the top 10 properties (US and non US) are fairly mature with the exception of Wikipedia and Fox/Myspace. If you include a few more properties, you get this chart:


When you look at Yahoo! and many other properties on this list, you see that they are mature properties, even on a global basis and their audiences are growing in the single digits.

While the Internet may be far from mature, many of the leading businesses on the Internet are starting to be.

You can see this even more dramatically in the worldwide page view numbers below:


Yahoo!’s worldwide page views are flat, Microsoft’s are in decline, as are eBay’s and Time Warner’s (AOL’s). Only Google and MySpace grew last year.

Now some of this may be a move to ajax and other more interactive web page technologies that dampen page views. But I think its more likely the deportalization of the Internet and the move of audiences to other places where they get more value.

So I go back to Mark’s post that I linked to at the top of this post. Mark says:

what i care about is that they deliver a high quality, targeted
audience to major advertisers. if they lose share to myspace and
google, it still doesnt matter because the overall market is growing
rapidly and will bring them with it.

I am not sure that last sentence is accurate. The market Yahoo! and everyone plays in is maturing. Market share matters now. And Yahoo! is losing share to Google and MySpace and more importantly, the rest of the Internet (the long tail). That’s what I think.

#stocks#VC & Technology