We are hopeful that the company will lay out more conservative guidance for 2002 as a means to rebuild credibility with investors.

Although we had anticipated tepid guidance, the company was far more conservative than we anticipated. The company projected April quarter revenue in the range of $14.2 billion to $14.6 billion, with earnings of 39 cents to 41 cents per share. This was below our previous revenue and earnings estimates of $14.6 billion and 41 cents per share.

While the company's sales funnel remains strong enough to exceed this range, the company gave a slightly conservative guidance to reflect uncertainty related to timing of certain orders.

While only 10 percent are considered 'financially troubled,' virtually every Internet company we have come across is tightening its belt. Clearly, the company has a lot of work in front of it.

Yahoo! is embarking on a major transformation. The company must now prove that online advertising is cost effective and integral to the marketing mix of traditional advertisers.

The company must now prove that online advertising is cost effective and integral to the marketing mix of traditional advertisers. There is an expectation that after six to nine months of calling on traditional advertisers, dollars will come pouring in. Our research suggests that turning 'toe-dipping' budgets into real dollars may take over two years.