The equities research team at Merrill Lynch Wednesday reinitiated coverage of Yahoo! The securities firm cited Yahoo!'s experienced management team with roots in traditional media and consumer-related
businesses, its revamped business model, and its staying power during the boom and bust Internet cycle as main reasons for covering the Web portal anew. Yahoo!'s robust outlook for growth includes
online ad revenue, sponsored search, Internet usage growth, the cross-selling of premium services and international adoption of the service. Risks include slowdown in secular growth of Internet usage,
increased competition, slowdown in migration of ad dollars online, failure to convert users to premium content services, high-cost of employee stock options, and the pending initial public offering of
rival Google. Merrill Lynch said Yahoo! was neither overvalued nor under-priced.
