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10/18/2005
  Why I wonder about Wall St. analysts

Ho hum, another stellar quarter for #2 Yahoo.

THESE are the salad days for internet advertising.

I've met a good number of Wall St analysts, and I sometimes wonder how they are able to generate random quotes as easily as they do. At the end of this Investor's Business Daily earnings coverage article, Citigroup internet analyst Mark Mahaney makes some random comments about Yahoo needing to upgrade it's search functionality.

Even as its revenue soars, Yahoo faces hurdles, analysts say.

For one, it needs to improve its search engine to better compete with Google.

That could take time, says Mark Mahaney, an analyst at Citigroup.

"They really need to fix the search engine, and that seems like that's a March quarter event," he said.

One analyst says "they really need to fix the search engine". And he's guessing how long that will take! Of course, it's not clear at all where he's coming from. I used Yahoo to look up a lot of Mahahey's past comments and can't find anything about Yahoo being that much behind in search technology. Then I tried Google and got even less.

How would he determine that Yahoo's search is so obviously behind? Would Yahoo tell him that - and give him the time frame. I seriously doubt it. If anything is behind it's not the search part - it's the PPC ad system. Maybe the search is to blame because the Yahoo/Overture ad system doesn't convert searchers into buyers as well as Google's? Who knows? But that's too much nuance for a quick quote at the end of the article, isn't it?*

This is why I wonder how much the Wall St. analyst guys just make this stuff up RIGHT WHEN the press calls for the quote. And to top it all off, the people that print this random tripe are worse than the analysts who generate it.

*Actually, I'd blame it on the crappy branding of Y!SMS - but that's just me

 


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