QUOTE AND NEWS
TechCrunch  2 hrs ago  Comment 
Microsoft’s search engine Bing.com and other sites, including live.com, suffered a brief outage of somewhere around 20 minutes today, give or take, according to reports on Twitter and other website monitoring services. While Bing.com and others...
New York Times  5 hrs ago  Comment 
You can adjust your settings so that only certain people can see your images. Also, syncing files between Macs and PCs.
Clusterstock  8 hrs ago  Comment 
Nearly 4,000 Yahoo employees sat and waited for Marissa Mayer to explain herself. It was around 10:30 a.m. on Thursday, Nov. 7, 2013. Some of the employees, those in Yahoo’s Santa Monica and New York offices, sat at their desks watching a...
SeekingAlpha  10 hrs ago  Comment 
Forbes  Dec 31  Comment 
Investors in Yahoo! Inc. (NASD: YHOO) saw new options begin trading today, for the February 2015 expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the YHOO options chain for the new February 2015 contracts and...
Forbes  Dec 30  Comment 
Since Marissa Mayer took over the company in 2012, the company has been focusing on improving user experience and increasing user count. However, it has paid very little attention to the needs of the marketers that advertise across its properties....
Yahoo  Dec 30  Comment 
Yahoo Finance is answering your top-asked finance question of 2014 based on Yahoo search. The number one thing you wanted to know was, “Should I buy Apple stock?”
Benzinga  Dec 29  Comment 
The media space has gone a dramatic transformation in 2014. Tapp TV Founder and CEO, Jon Klein, was recently on Bloomberg to discuss the winners and losers of the media space. Winner: VICE "VICE has so cleverly positioned itself as the...
Motley Fool  Dec 29  Comment 
Errors on your credit report can cause serious problems when you apply for a loan, credit card, or even a job. Here's how to check for them and what to do if you find one.




 

Yahoo! Inc. (Nasdaq: YHOO) is a global internet services company that operates the Yahoo! Internet portal. It provides varied products and content, from email and search to media streaming and downloads. Its main revenue sources come from advertising and marketing services. In fiscal year 2010, Yahoo reported revenues of $6.3 billion and net income of $1.2 billion. While Yahoo's main presence is in the United States, its well-established name and solid partnerships in Asia make international expansion a promising opportunity for the company. In response to the fast growing mobile advertising market, Yahoo has been actively pursuing partnerships with carriers and original equipment manufacturers in the mobile industry, as well as tailoring their existing marketing services to mobile users.

Company Overview

Founded as a web directory by two Stanford graduates in 1994, Yahoo! had become a dominant player in the field of Internet services although its competitive position has since become eclipsed by Google and others. The company had experienced healthy growth in top-line revenue year over year for the last four years, but net income has fallen year-over-year due to increased costs of doing business in the increasingly competitive sphere of internet advertising. Specifically, Yahoo!'s year over year cost of revenue is increasing faster than their revenue growth.

Trends and Forces

Increase in Online Advertising

Advertising spending continues to show a disproportionate skew in favor of newspaper, TV and direct mail. However, the Internet channel has grown at approximately 18% per year--faster than any other channel--taking share from stagnant channels such as newspaper, which has been flat over the same time period. Continued growth in quality and availability of Internet access means that the Internet services sector--particularly Internet advertising--will remain lucrative for some time to come. An increasingly pronounced trend of replacing print directories and classifieds with virtual alternatives will also create a push for online search use as well as increase demand for online classifieds.

Online Video Advertising Growth

Video advertising promises to be a particularly lucrative area of rapid growth in the online advertising sector as online video viewership continues to rise. In research released by comScore, data shows that 175 million U.S. Internet users watched online video content in October for an average of 15.1 hours per viewer.[1]. In terms of video property and viewership, Yahoo ranked second with 53.8 million viewers, behind Google Sites's 146.3 million unique viewers and ahead of Viacom Digital, VEVO, and Facebook[1].

  • Branded vs. Search Advertising

Branded advertising is often image-based and usually priced on an "impressions" basis--the more times it shows up, the more the advertiser pays. Search advertisements are primarily text-based and usually rely on click-through; the more times a particular link is clicked, the more Yahoo! is paid. Together, the two constitute a good balance of different kinds of online advertising. However, branded advertising tends to depend very heavily on the economic situation of the brands in question.

  • Mobile Advertising

Mobile advertising is in its nascent stages and is currently growing at more than 20% per year, making it a powerful source of potential growth for Yahoo! On its end, the company has been actively pursuing partnerships with carriers and original equipment manufacturers in the mobile industry, as well as tailoring their existing marketing services to mobile users.[2]

Competition

  • Google is Yahoo!'s biggest competitor in search advertising. Google's acquisition of popular video site YouTube put it directly against Yahoo! in media streaming, and the two already have a long-standing rivalry over search-based online advertising. Yahoo! has lost significant search market share to Google. In 2009, Google made headlines by overtaking Yahoo! in unique users per month. However, Yahoo! recently released a next-generation online advertising platform system called Panama. Their system will in theory optimize advertising profits by increasing the average revenue per search click and has returned modestly successful results so far. Yahoo!'s recent acquisitions of RightMedia and BlueLithium further solidifies its position in display advertising. Finally, Yahoo!'s perceived role as a community-based entertainment site may also give it a slight edge over Google in entertainment-based advertising. However, Google's MySpace-YouTube advertising alliance may be poised to challenge the company.
  • Microsoft, with the introduction of Windows Live and adCenter, Microsoft is also a growing threat. Microsoft's acquisition of LiveJournal gives it a significant foothold in the webblog scene, and along with Google, it has been steadily gaining ground against Yahoo! in the European Internet services market. However, by itself Microsoft remains less a threat than Google.
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