QUOTE AND NEWS
Jutia Group  9 hrs ago  Comment 
[at Barrons.com] - Shares of Yahoo! (YHOO) are up 71 cents, or 1.6%, at $45.48, as the Street mulls the prospects of the company's core business of search and display ads, following further activist comments suggesting the company is worth more in...
Benzinga  11 hrs ago  Comment 
Activist hedge fund Starboard Value LP publicly urged Yahoo! Inc. (NASDAQ: YHOO) last September to merge its core business with AOL, Inc. (NYSE: AOL), something that it reiterated in January this year. However, the hedge fund isn't pressing for...
Yahoo  Apr 14  Comment 
Yahoo Finance's Midday Movers is live each weekday at 12pm ET, covering all the latest news on the markets, the economy and the biggest stories of the day.
Benzinga  Apr 14  Comment 
CNBC's Fast Money's Pete Najarian recommended on the show a long position in Lowe's Companies, Inc. (NYSE: LOW). Brian Kelly wants to take some profits in Europe and sell WisdomTree Germany Hedged Equity Fund(NASDAQ: DXGE). If Yahoo! Inc....
TheStreet.com  Apr 13  Comment 
NEW YORK (TheStreet) -- Yahoo! confirmed that it's changing some key slots on its management team, but these moves are likely being made from a position of weakness rather than strength. In confirming that Yahoo! had undergone another...
New York Times  Apr 13  Comment 
Yahoo promoted Simon Khalaf, who joined last year when his start-up was acquired, to oversee the company’s home page and main mobile app.
Jutia Group  Apr 13  Comment 
[at TheStreet] - Yahoo (YHOO) shares are climbing today, one session after the company announced the resignation of Senior VP Mike Kerns. Read more on this. Yahoo! Inc. (YHOO), valued at $42.06B, started the session at $45.25.   Today’s...
TheStreet.com  Apr 13  Comment 
NEW YORK (TheStreet) -- Yahoo shares are up 0.38% to $45.35 in trading on Monday after the company announced the departure of Senior VP Mike Kerns following Friday's closing bell.Kerns, who joined the company in 2006 following its acquisition...
TechCrunch  Apr 11  Comment 
 We’re told never to forget the ultimate laziness of humans, but when it comes to research in the internet age, sometimes that laziness can shock even the most prepared of minds. Students in grade school have grown accustomed to “remixing”...
New York Times  Apr 10  Comment 
Yahoo promoted Simon Khalaf, who joined last year when his start-up was acquired, to oversee the company’s home page and main mobile app.




 

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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