Weaker Internet Gaints, stronger Dollar!

August 26, 2008 · By Faizan Filed Under Features

A weak dollar resulted in a big boost for internet gaints Google, Yahoo, and Ebay. Now as the dollar attains strength trouble maybe just around the corner. It is evident that any American company that has international operations is affected by the exchange rates.

“Currency rates have had a significant positive impact on reported revenues for U.S. Internet companies over the last few quarters,” Said Sanford C. Bernstein analyst Jeff Lindsay.

Other multinational companies also took advantage of the weak dollar, Hewlett-Packard for example reported a 10.5 percent rise (compared to last year) in its fiscal third-quarter revenue to $28 billion.

Most of the costs of internet companies are in dollars, whereas most of their revenue is in foreign currency.

If the dollar’s might remains on the rise, internet companies could suffer dearly.

According to a caluclation made by an analyst, if the dollar rose another 10% through the next year ratings could slip by 8% at EBay and 13% at Yahoo.

Share and Enjoy: