membership



Share

Google or Yahoo?



September 27, 2011

google or yahoo?

Introduction - Google or Yahoo?

The decision, if you are contemplating such a move, to buy Google or Yahoo shares or options, may be helped by reading the following information.

Yahoo! Inc. (NASDAQ: YHOO) is one of the largest search engines in the world. Over the past two years, the company has significantly underperformed the largest companies in the tech-heavy Nasdaq.

yahoo vs nasdaq



yahoo logo

There has been very little improvement in the company’s image! Yahoo still has the same poorly designed interface and the same humdrum logo it has had for years….. maybe a new management team would provide more value to shareholders…..however, I doubt if this would matter that much!

If you bought shares of the company over the past 24 months, and sold your positions recently then you would have suffered major losses.

At $15 share, Yahoo is trading at 15 times next year’s earnings. That’s expensive for a large-cap technology company – especially considering that World Dominators Intel, Microsoft, and Cisco are all trading below nine times earnings.

To make matters worse, consensus estimates figure Yahoo will grow its earnings by only about 10% annually over the next three years.

google sign

If you, as an investor or trader, are looking for a large-cap tech company with value and growth potential, Google (NYSE: GOOG ) looks like the much better play, particularly if you options trade. Therefore, the question Google or Yahoo?…..becomes clear!

Google is the largest search engine provider in the world. The company trades for only 13 times earnings. These earnings are expected to grow north of 20% annually over the next three years.

Plus, Google just came off one of its best quarters as a public company. Revenue topped $9 billion – a new record. Revenue and earnings will likely hit new record highs when the company reports its third quarter results in October. These facts are quite significant when comparing "Google or Yahoo?" for an investment strategy!

Another criterion, which may run contrary to normal thinking, is that the CEO of Google has been called before Congress to testify for "unfair" business practices…..but actually means that Google is making its’ presence felt!

When a company owns such a huge market share; the government, when pressured, regularly reviews them for "unfair" business practices…..which is what is occurring with Google. Most mainstream investors get worried when something like this happens to a stock, but I believe this provides a great buying opportunity, particularly if the company is a world dominator in its’ field, and if you are like ” S.O.M.E.”, benefit greatly from options trading.

Eric Schmidt

Google has, at last, bowed to pressure from U.S. lawmakers, and has consented to send company chairman Eric Schmidt(pictured) to testify before an anti-trust subcommittee. The Federal Trade Commission has begun a formal investigation into Google's business practices.

What does it all mean? It means Google is such a fantastic, market-dominating business; it has attracted the government's attention. According to the San Francisco Chronicle, two senators sent a "strongly worded letter" to Google, demanding it send one of its high-ranking officers to testify.

These practices ….. consisting of constant innovations, buying smaller businesses that can serve Google's customers and shareholders, and being a general pain-in-the-neck to compete against – have created one of the world's most valuable brands... and an incredible business. Google's gross margin is consistently in excess of 60%, and its after-tax profit margin is an enormous 29%.

If we delve further into this inquiry by the government, as in many situations, it is all for show! Google is the No. 1 search engine because it revolutionized the way Internet searches are done. And, certainly Google has not forbidden anyone from using Yahoo.

Conclusion – Google or Yahoo?

In summing up, when a company is so dominant and profitable that it draws government scrutiny – like Intel, Microsoft, and Google have all done in the past few years – it's not time to run away. It's time to seriously consider buying it.

If you buy it at the right price, you're much more likely to collect safe, ever-growing dividend payments – or make capital gains – than you would buying a middling business the government leaves alone.

Therefore, instead of buying Yahoo and hoping for a “miracle” takeover, consider buying the World Dominator in Internet search….Google. The question…Google or Yahoo?...becomes immaterial in light of the information above!

”Success is simple. Do what's right, the right way, at the right time.”



membership



Take control of your future prosperity the Easy way. Become a member of Stock Options Made Easy today!



Back to Stock Options Made Easy from Google or Yahoo?






Search Stock Options
Made Easy



Enjoy Relaxed or Fast-Paced Trading? Choose your Membership Style...

Whether you prefer to take a laid-back approach to your trading,

or to charge ahead in your options trading,

 Stock Options Made Easy Armchair Trader and Cut-to-the-Chase Trader Memberships put everything you need to succeed at your fingertips for just  $39 or $79 per month.





Search Stock Options
Made Easy




newsletter-free


Subscribe to our FREE
newsletter for all the latest options news!


Enter Your Email Address

Enter Your First Name











Follow S_O_M_E on Twitter











Subscribe to our FREE
newsletter for all the latest options news!


Enter Your Email Address

Enter Your First Name











Follow S_O_M_E on Twitter