Daniel Boone and the Yahoo

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Daniel Boone is one of the most beloved folk heroes of American history.  You likely know of his service in the American Revolution.  You may have heard that he served several years as a politician.  If you know anything of his pioneer stories then you have learned what he did to help facilitate the westward expansion of the United Sates by the exploration he did of modern day Kentucky and Missouri.  You may know Daniel Boone.  But have you heard the story of when he shot the yahoo?

Cryptozoology fascinates me for some reason.  Recently, I came across a story in a biography of Daniel Boone.  In it, it says that Daniel would often tell stories and brag about the time he shot a giant hairy wild-man that he called a yahoo (presumably after a creature in one of his favorite books, Gulliver's Travels).  Bigfoot enthusiasts love this story, as they feel it lends credence to the existence of Bigfoot from testimony of a popular American historical figure.

But there are of course reasons to believe that the yahoo was never shot.  Several historians dispute the historical accuracy of the claim that Daniel Boone ever told such stories, and even if he did, he was known to have a sense of humor.

In a similar way, the publicly traded company Yahoo! (NASDAQ: YHOO) has been rumored to be a dying company.  Google (NASDAQ: GOOG) shot it.  Despite the stories you've heard, it may interest you to know that Yahoo! is not dead yet.

A Look Back

There was a time when Yahoo! was everything hip and relevant in search engine technology.  It was revolutionary: find what you needed on the Internet without knowing the web page address.  It worked just fine.  They had great commercials with a guy who sang "ya-hoooooooooooo" at the end.  Things were good.

But then Google came along.  I had never heard of anything so ridiculous.  When I asked my tech friends what Google was, they said it was like Yahoo!.  I asked what the difference was.  Nothing, they said.  I could see no possible way Google would convince people to switch from Yahoo!.

Well, we all know that Google was able to establish itself online, and not just as a search engine.  They changed how companies advertise online.  They changed how websites make money by hosting ads.  They also have a range of products that can be used for free that in turn nurture loyalty towards Google.  Imagine life without Google Docs, Picasa, or Blogger.

Not Dead Yet

Just a couple days ago, Jim Cramer made a bullish call on Yahoo!.  His reason?  "Yahoo! has a CEO who, for the first time in ages, makes me feel that this is going to come back. I would use any momentary weakness to get into Yahoo!. It hasn't lost its mojo, and we use it every day."  Cramer is referring to the newly appointed Marissa Mayer.

It's easy to see why Cramer likes her.  She's proved herself as a former Google executive.  She's a good image for the company as well.  Yahoo! has this vibe of old and done, but that could change since Marissa is the youngest CEO of a fortune 500 company.

But running a company isn't a beauty pageant.  It's not about the likeability of the CEO--it's about the numbers.  Well, in that case, here are some numbers that may surprise you.

<img src="http://media.ycharts.com/charts/0944b4c76bfc23cf1bba9f5938a5e40f.png" />

YHOO Net Income TTM data by YCharts

Compared to its competitors, Yahoo! has grown net income the most over the past three years.  Granted, most of that came in the latter part of 2012, coincidently around the time Marissa Mayer took over. 

<img src="http://media.ycharts.com/charts/1d92ff35d0c996da4e3391168fb4f30b.png" />

YHOO Free Cash Flow TTM data by YCharts

Yahoo!'s free cash flow growth has been even more impressive and steady.  They have been able to more than double Google's performance over the past two years.

What It All Means

Is Yahoo! suddenly the investing opportunity of a lifetime?  No.  I'm unconvinced of what the future holds for Yahoo!.  But, from what I've seen, and hope you have too, Yahoo! is not dead yet.  It's too early to count them out.  Despite what your feelings might be to the company, when you look at the recent numbers, you realize that this company is heading the right direction.


thequast has no positions in the stocks mentioned above. The Motley Fool owns shares of Google and Microsoft. Motley Fool newsletter services recommend Google and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!

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