QUOTE AND NEWS
TheStreet.com  11 hrs ago  Comment 
NEW YORK (TheStreet) -- A few weeks ago, there was a popular hypothesis being bandied about on business television that investors might dump Yahoo! shares in order to buy stock in the upcoming Alibabaa(BABA) initial public offering. The...
Jutia Group  Sep 10  Comment 
[at Bloomberg] - Sept. 10 (Bloomberg) –- Bay Crest Partners Equity Derivatives Strategist Anshul Agarwal discusses eBay and his options strategy for Yahoo with Julie Hyman on “Market Makers.” (Source: Bloomberg) Read more on this. Yahoo!...
Jutia Group  Sep 10  Comment 
[at Bloomberg] - Sept. 10 (Bloomberg) –- Bay Crest Partners Equity Derivatives Strategist Anshul Agarwal discusses eBay and his options strategy for Yahoo with Julie Hyman on “Market Makers.” (Source: Bloomberg) Read more on this. eBay Inc....
SeekingAlpha  Sep 10  Comment 
By Matthew Smith: Now that the new product unveil is completed for Apple (NASDAQ:AAPL) we shall see the next nine days in the news cycle centered on the potential sales figures for the two new iPhones and what those numbers will mean for the...
Benzinga  Sep 10  Comment 
CNBC Options Action's Mike Khouw said on the show that he noticed higher than average call options volume in Yahoo! Inc. (NASDAQ: YHOO). More than twice of its average call options volume was traded on Tuesday. Khouw added that a lot of call...
Forbes  Sep 9  Comment 
A study of analyst recommendations at the major brokerages shows that Yahoo! Inc. (NASD: YHOO) is the #34 broker analyst pick among those stocks screened by The Online Investor for strong stock buyback activity. To make that list, a stock must...
The Economic Times  Sep 9  Comment 
Besides Apple, Yahoo, down 1.7% at $41.12 and SinoCoking Coal, up 194.2% to $8.59, were among the most actively traded on the Nasdaq.
TheStreet.com  Sep 9  Comment 
NEW YORK (TheStreet) -- Alibaba's IPO roadshow kicked off Monday with a bang. There were huge crowds in attendance at the Waldorf Astoria hotel in New York to hear the pitch and most came away from the meetings raving about the scale and scope of...
Jutia Group  Sep 9  Comment 
[Zacks] - Yahoo! Inc. (YHOO) was a big mover last session, as the company saw its shares rise over 5% on the day. Read more on this. Yahoo! Inc. (YHOO), valued at $41.32B, opened this morning at $42.00.   Shares have traded today between...




 

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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