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IDEARC INC Message Board

  • connect_thee_dots connect_thee_dots Feb 11, 2008 9:18 PM Flag

    We are going higher........

    In fact, we were well on our way to moving higher until S&P "closed the door after the horse left the barn" with their downgrade. Given S&P's analysis of MBI and ABK, their credit ratings are worthless.

    Also, the people on the message board are most negative, and their thought process is very weak.

    Google and Yahoo have been around for years, IAR's revenue is stagnant, but the economy is struggling, so the top line weakness appears a function of a cyclical downturn not a fundamental shift away from this form of advertisment.

    In fact, I looked at my Yellow page book this evening, it is as full as ever. So clearly, people still find value in the service.

    A few points to think about, the businesses that pay for ads can deduct their payment as a business expense. Secondly Google and Yahoo charge money to run an advertisment. So indirectly, Google and Yahoo may be in competition, but is it materially less money to advertise with Google or Yahoo as opposed to the Yellow Book?

    Lastly, the economics of this business are great. So, they can weather a flat top line better than other businesses which have very low operating margins.

    Shorts, feel free to pick holes in my arguments. Any good information on a apples to apples cost comparsions would be appreciated (how much an advertisment costs in Google vs. Yellow Pages.

 

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