E-Commerce News: News: Yahoo! Falls as More Analysts Cut Ratings

Yahoo! Falls as More Analysts Cut Ratings

By Nora Macaluso
E-Commerce Times
12/11/00 10:18 AM PT

A number of analysts have cut ratings on Yahoo! in recent weeks, citing a slowdown in the market for online advertising.

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Yahoo! (Nasdaq: YHOO) slid in early trading Monday as reports said two more securities firms issued cautionary comments on the stock.

Yahoo! was down 2 3/8 at 32 9/16 in the first few minutes of trading. Reports said Robertson Stephens lowered the stock's long-term rating to attractive from buy, and cut fourth-quarter and 2002 revenue and earnings estimates. The firm reportedly cited a weak online advertising market and a "lack of visibility" into other sources of revenue at the company.

At Deutsche Banc Alex. Brown, analyst Andrea Williams Rice reportedly said the stock could trade below 20 in the first half of next year.

A number of analysts have cut ratings on Yahoo! in recent weeks, citing a slowdown in the market for online advertising. On Thursday, the stock fell to a 52-week low after W.R. Hambrecht lowered its rating to neutral from buy.

Earlier in the week, a research report from Merrill Lynch analyst Henry Blodget sent the stock plunging. Blodget said he cut his first-quarter revenue estimate for Yahoo! to US$290 million from $324 million, and lowered his second-quarter estimate to $330 million from $338 million, citing a "lousy" advertising climate.

SG Cowen Securities, Dain Rauscher Wessels and Janney Montgomery Scott have also in recent weeks cut ratings on Yahoo!, which is said to be heavily dependent on advertising.

Online advertising companies are also feeling the pain. DoubleClick, Inc. and 24/7 Media are among those announcing layoffs and cost cuts in recent weeks as they deal with a decline in client spending.

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