Of course, Jobs had his bad years, too. And Page just turned 40 in March. At that age, Jobs was still two years from taking back the reins of Apple, a has-been mucking about with failed computer designs and a struggling animation company called Pixar.
But I believe, along his way, even if he becomes a business legend in his own right, Page will need more than one lesson. And he’s going to get more than one lesson.
The disclosure at the bottom of this story will tell you I own stock in Google Inc (NASDAQ:GOOG). I own exactly 10 shares, and sold the other half of my holdings at a substantial profit a few months ago, at $808. The company passed that mark on April 23, but it’s based on an “earnings beat” which, as I’ve noted elsewhere, is mostly technical.
Yahoo’s Mayer
The best reality distortion in technology today, however, belongs to Yahoo! Inc. (NASDAQ:YHOO) CEO Marissa Mayer.
Mayer was the ambitious executive Page let go as he cleared the decks at Google for financially-oriented yes-men. She is given credit for Google Inc (NASDAQ:GOOG)’s clean home page, and many other innovations, some of which worked and some of which, like Google Health, failed.
Mayer’s age, she’s 37, and her sex are just part of her story. The key point about her is that she is an engineer. And she has steered Yahoo! Inc. (NASDAQ:YHOO) away from its decade-long sloth as a content company, back into the main path of progress and profit.
But if you think Mayer has delivered bottom-line results to Yahoo, you’re mistaken. She has used her reality distortion field, which has driven the stock up 55% since her July 16 hiring, to shake the company to its foundations. But the financial gains have all resulted from the company’s long-time investments in Alibaba, the Chinese e-commerce site, and Yahoo Japan. Her sale of half of Yahoo’s stake in those companies helped catapult the shares upward, and the fact that Yahoo still holds 20%, so Alibaba results appear on its own books, have done the rest. In fact, Yahoo! Inc. (NASDAQ:YHOO) today has less revenue than it did in July – it has not grown. Because of the extrordinary gain of last year, the company appears to have a PE of just 7. Take that quarter out and it’s a more Google-like 25.
Mayer, however, has been making some very smart moves. Its growing mobile alliance with Apple has already resulted in a few impressive apps, and brings Yahoo inside the best online monetization scheme around. Google Inc (NASDAQ:GOOG)’s loss is Mayer’s gain, and since Yahoo is a much smaller company than any of its tech rivals, success in software will in time flow to the bottom line in a meaningful way.
I decided to get on board this train relatively early, buying 100 shares of Yahoo! Inc. (NASDAQ:YHOO) when it was down around $15/share. At their current price, $24.33, I’m looking pretty good, but instead of selling now I’m going to hang on, and wait for the next break in the halo to buy more.
That’s the thing about reality distortion fields. They’re blurry. Wait for any halo holder’s crown to appear to falter before you get on board any such company. Opportunities will come.
The article Tech’s Biggest Reality Distortion Field originally appeared on Fool.com and is written by Dana Blankenhorn.
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