Bill Burnham has a different perspective:

“Why is Google worth more than Yahoo, despite generating 10% less in revenues? Two simple reasons: Growth and margins. On the growth front, Google’s Q3 revenues grew 15% sequentially compared to Yahoo’s 9% growth. On the margin front, Google’s operating margins (less the one-time legal settlement with none other than Yahoo) were 26% in the quarter compared to Yahoo’s 19% operating magins. As the old maxim goes ‘Wall Street Pays For Growth’ and Google is clearly growing faster at higher margins than Yahoo.

The big question now is whether or not Google can sustain its premium valuation to Yahoo. Detractors might point out that Google is more vulnerable than Yahoo because Google’s revenues are highly concentrated in search advertising, however the other side of the coin is that Google has plenty of opportunity to expand outside of search and into many of the paid subscription services that Yahoo and other internet portals now offer.

With its recently launched G-Mail service and rumors of an IM client and other portal staples forthcoming, I suspect that Google has a lot of incremental growth opportunities ahead of it that will help it sustain its growth. Indeed, at current growth rates Google will surpass Yahoo in terms of quarterly revenues by Q1 05 and they will do this despite the fact that they remain largely a one-trick pony. That’s quite a pony!”

http://billburnham.blogs.com/burnhamsbeat/2004/10/truth_will_out_.html

Currently, I have fourteen (14) RSS modules and four (4) Yahoo provide ones – and I have one advertisement to look at. I find that business model quite compelling compared to paying for the RSS reader FeedDemon @ 29.95 USD a pop.

Yes, I said FOURTEEN RSS modules (including Battellemedia).

Move your bet Jim.

And Yahoo… bring on the personalized text ads.

Good day,

- mike

Case in point, I switched from My.Yahoo to MyWay to escape the advertising on Yahoo!. Essentially, I moved (as a consumer) from the Yahoo business model to the Google business model.

My next step, with RSS and all the tools that are evolving, is to quit MyWay for an RSS constructed page. I won’t need a Yahoo! or a MyWay to contruct the page for me. And it will be a page that has advertising that I want – not advertising that is foisted on me – if it has any advertising at all.

We shall see what business models emerge in the environment I envision, but I wouldn’t bet on Yahoo! or MSN or Google.

I’m betting on Quinset.

Cheers!
Jim Bursch
jimbursch.com