Why is Google at $ 450 and Yahoo is only $23/share?

Question

An armchair comparsion-- the balance sheet differences in the two are not near as vast as the share price.

Answer 1

Stocks generally "split" when they get around $100 to keep their price per share down. Google simply likes to do their own stock and has no intention of splitting, catering to large institutional investors who tend to hold for longer periods of time and discouraging individual investors from buying shares, something Google has done since their IPO.

But if you are infering that the share price means Google is a lot more valuable right now, or Yahoo seems exceptionally cheap, you happen to be correct although the share price itself hardly tells you this fact.

Google is highly valued because their profit has been doubling for some time now, they are #1 in search, and they capitalize on their advertising far better than any company in the planet.

Yahoo is the #1 website in terms of traffic, but they haven't monetized this nearly as well as Google. They are trying to copy Google's success in monetizing their traffic, but the rollout of this strategy has been slow and won't take hold until early 2007.

In my opinion, Yahoo is a bargain and is a good choice.

Answer 2

You realize that you are comparing apples and oranges here correct? You cant just say the price of Google is $450 a share and Yahoo is $23 a share and think it means the same thing. How many shares does each company have outstanding? If Google only had 10 shares and Yahoo had 1000, then Google would only be valued at $4500 while Yahoo would be values at $23,000. What you want to do is to look at the Market Capitalization (worth of all outstanding shares) of Google vs. Yahoo for a true comparison. Another good measure is the P/E of the shares (price to earnings ratio), and you can see which one is trading at a higher ratio than the other (usually a higher ratio would be because investors expect better growth). You have much to learn about stocks, grasshopper!

Answer 3

Because GOOGLE has better local and International connections...plus Google t charge for every service a lot more than yahoo. I personally like to deal and wheel with yahoo. Now is the time to buy yahoo shares and stay back and wait. In the long run time will really tell who is the best Yahoo or Google.

Answer 4

You cannot just compare the stock price. Alone the stock price means nothing.
Compare, for example, the P/E ratio to get a better idea how the companies are valued.
Google has higher P/E ratio, but it has higher growth rate so this is to be expected.

Quick, dirty explanation

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