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Saturday, October 27, 2012

Yahoo! VS. AOL

Happy weekend to all our viewers! Today's post is our debate topic, and we strongly encourage anyone interested to comment and pick either Yahoo! (YHOO) or AOL (AOL). Both companies focus on online properties and services. When you open your web browser, there's a good chance one of the two is your home page! Yahoo! was established in 1995, and is currently headed by Marissa Ann Mayer. In 1999, Yahoo! experienced an extreme surge in stock price, jumping nearly $90 to about $110, but has since then seen a steady decline. Since 2008, stocks have remained near $16-17. In exploring Yahoo!'s development on the market over the last month, we noticed a trend we previously had never seen - never opening at the same price as the previous day. This severe fluctuation may be the outcome of a Chinese company's, Alibaba, plan to buy 40% of stocks in the company. This brought consumer insecurity with investing in YHOO, but early October's return of CEO Marissa Ann Mayer refilled some security, and prompted an increase in stock price. The company remains on a rather unpredictable path, especially with Alibaba's interest in possibly buying majority control of the company. We advised our members against investing in the company, but turned a profit ourselves earned $7.70. Under regular conditions (buying with a fair degree of confidence, not just to see how performance compares to our predictions), however, we would not invest in Yahoo!.
As with Yahoo!, AOL focuses on online properties. AOL, however, was established in 1983 - twelve years earlier - and is now headed by CEO Timothy Armstrong. This company experienced a decline in share price from 2008 until mid 2011, when it hit a low of about $10, and begin recuperating. Now, stocks average around $35-37. In late September, AOL partnered with Vibe Media and saw significant growth for over a week, increasing $3. Another surge upwards occurred when AOL decided to focus more on mobile platforms, a decision made public on October 4th. Since then, the company has curved downwards in price and moved back up - recent days have notice the trend downwards again. Unfortunately, our simulated investments in AOL turned negative, and we have lost over $20 on ten shares. We advise to invest in AOL, but with caution as the performance of its partners can easily affect the company. Have you invested in AOL or YHOO before, if so, how did you do? Although we do not fully advise investing in either company, we would love to hear how are readers have been doing on the market! Feel free to leave a comment, and we will get back to you ASAP. Thanks for reading!

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