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Analysis of the Internet -- Software and Services Industry

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Analysis of the Internet
Software and Services Industry

BE 530 Course Project
Winter 2012

Tingting Xu

Introduction
The industry I have chosen for this project is the Internet Software & Services. Companies in the Internet Software and Services Industry develop and market internet software and provide internet services including online databases and interactive services, web address registration services, database construction, and internet design services, to name a few Information Technology is currently one of the largest ten sectors in S&P 500 with a sector weight of 17%. (See fig.1)

Fig.1

The Information Technology Sector is split into three industry groups: software and service(39.14%); technological …show more content…

During the 5 years under consideration, eBay has positive net income except for the 2007. (data from ycharts.com)

eBay Inc. profit in 5 years
VeriSign has a market cap of 4.28B, which makes it the third place winner. The company provides domain name registry services and internet infrastructure services. For the six months ended June 30, 2011, VeriSign, Inc. 's revenue increased 11% to $371.4M. But the net income decreased 57% to $34.6M. Increasing in restructuring charges and higher interest expense, decreasing in operating income together contribute to the net income decreases. In the past five years, VeriSign’s net incomes are negative except the middle of 2010. (data from ychart.com)

Verisign Inc. profit in 5 years

The next is Yahoo! with a 616.19M market cap. Yahoo! is a digital media company that provides advertisers engaging and canvases to connect with their target customers. For the six months ended 30 June 2011, Yahoo! Inc. 's revenue decreased 31% to $2.44B. Its net income decreased 14% to $460.0M. The revenue decrease shows that the income from search segment decreased. The decrease in net income also comes from the fact that general & administration expenses increased, restructuring charges increased and lower gross profit and other income. Yahoo! had a negative net income

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