On internet customers was rewarded by stock investors

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on Internet customers was rewarded by stock investors who made it the darling of the Internet boom and increased its P/E ratio to over 500. However, during the technology bust, Yahoo struggled and its stock price fell to lows not seen since just after it went public (Value Line, 2010). The post-Y2K era was a time of restructuring for Yahoo. In 2000, it announced it would charge fees to list items on its auction site. Users responded by abandoning the site (Hoover’s Online, 2010). Yahoo struggled to find a way to make consumers pay for Internet services. Yahoo reduced its workforce by about 1000 employees (Hoover’s Online, 2010). During the post-9/11 era, Yahoo moved into new areas including music and ebooks. It also redesigned its webpages to allow for more advertising (Business and Company Resource Center, 2010). Stock investors responded positively and increased the stock price (Value Line, 2010). During the outsourcing era, Yahoo finally regained its stride. Increasing revenue from online advertising and paid search resulted in a doubling of sales and earnings during this period. Yahoo even had a 2-for-1 stock split in 2004 (Value Line, 2010). By the mobile/wireless era, Yahoo continued to expand its reach internationally, primarily Asia, and domestically, targeting Hispanics. It also purchased Flickr, the photo site, to augment its personal pages offerings (Hoover’s Online, 2010). Revenue continued to grow but earnings slowed because of the cost of the acquisitions and the resulting integrations. Investors did not overly punish the stock but did decrease the P/E ratio (Value Line, 2010). During the six eras, Yahoo refocused itself into an Internet advertising services firm as it sought the latest blockbuster Internet trend on which to capitalize through advertising. Overall, Yahoo had the highest total performance of all the firms, albeit partially because the price started so low in the browser era. DATA AND METHODOLOGY Is there a difference in the stock market performance of computer network and information technology services companies in the different period classifications? In this section, we compare the stock market returns of computer network and information technology services companies in six different twenty-month periods between the years 1996 through 2006. Five different information technology firms specializing in computer network and information technology services are the focus of this study. The primary data source is the Yahoo! finance website, which offers daily and monthly closing stock prices across multiple years. The six period classifications are the browser era, Y2K era, post-Y2K era, post-9/11 era, outsourcing era, and mobile/wireless era. The statistical methodology incorporates a nonparametric approach to comparing the stock market performance of a company in the six different periods. The Kruskal-
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Page 93 Academy of Accounting and Financial Studies Journal, Volume 15, Number 4, 2011 Wallis test offers the most powerful test statistic in a completely randomized design without assuming a normal distribution.
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