No Respite for Yahoo Yet

No Respite for Yahoo Yet

Yahoo’s (Nasdaq: YHOO) results sound like a broken record now. The company continues to disappoint the market and keeps floundering around in the hope of finding a strategy that will work.

Yahoo’s Financials

Yahoo’s second quarter revenues fell marginally to $1.04 billion, managing to beat the Street’s target of $1.03 billion. But despite the good news on revenues, their EPS of $0.16 was short of the market’s forecast of $0.18.

By segment, display revenues excluding traffic acquisition costs (TAC) were up 3% over the year with the number of ads sold increasing 9% over the year. Things aren’t all that gloomy considering that Yahoo managed to improve pricing on these ads by 10% compared with the four quarters of decline reported earlier. Search revenues fell 3% over the year despite the price per paid click improving 4%. The decrease was attributed to foreign currency movement. Yahoo’s mobile segment is seeing strong growth with revenues growing 54% over the year. Yahoo has over 600 million users accessing their services through a mobile device. Revenues from other sources fell 2% over the year.

For the current quarter, Yahoo projected revenues of $1 billion-$1.04 billion, falling short of the Street’s forecast of $1.07 billion.

Yahoo’s Initiatives

It is not that Yahoo is not trying to improve their offerings. During the recently ended quarter, they announced several innovations for their core products. Within mobile search, they introduced a new feature for the US users to improve search results. The new feature connects users to the people, places, and things that interest them by using context and location cues and leverage them to deliver relevant search results. For Yahoo Mail, they are now enabling users to instantly share web pages when using Firefox and have integrated Twitter and LinkedIn information in Contacts along with adding the ability to receive breaking news notifications via Mail through the news feed tab.

Yahoo continued to invest in content and earlier this month released Daily Fantasy, as part of their Yahoo Fantasy app that provides users a chance to win money every day with new fantasy lineups. They also tied up with NFL to live stream an International Series Game between the Buffalo Bills and the Jacksonville Jaguars from London this fall and extended their partnership with Live Nation through a live streaming of a music festival. They also launched several new daily programs including finance news, world news, and entertainment programming and added 14 new shows across their digital magazine channels.

They are helping marketers by improving their ad offerings. Advertisers now have the ability to choose from accredited, third-party vendors for fraud measurement across display and video at every stage of the campaign lifecycle. Driven by the rise of video ad formats, they’ve introduced native video and video app-install ads. The native video ads allow advertisers to integrate their brand content into Yahoo’s homepage, digital magazines, and apps. The video app-install ads integrate video ads with install ads to help drive app installs for the marketer. Yahoo is also improving mobile targeting by allowing marketers to leverage the capabilities of both Yahoo and Flurry Persona data.

Yahoo’s Worries

Yahoo’s big concern lies in their inability to deliver growth in their net revenues. Players like Google have managed to report a stellar 13% growth in net revenues, but Yahoo’s revenue has remained flat for the quarter. Also, while revenues are not rising, costs continue to do so. Driven by the high ad commissions paid to their partners, Yahoo ended the quarter with a net loss of $22 million. In fact, this was one of the rare quarters for Yahoo where they delivered a negative free cash flow.

Earlier this year, Yahoo filed papers for a spin-off of their Alibaba holdings into a separate company Abaco. The move is expected to help Yahoo focus on their core business. But some believe that the spin-off is primarily being conducted to show some profits on Yahoo’s financial statements.

Analysts estimate Yahoo’s Alibaba holdings to be worth $32 billion out of Yahoo’s market capitalization of $36.5 billion. Excluding Alibaba, Yahoo appears to be in tatters. Their stock is currently trading at $32.93 and had reached a year high of $52.62 in November last year.

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Photo credit: abhisawa/Flickr.com.

 

 

 

Yahoo is my comic relief anymore. Their stories are biased in their views and they are extremely left-wing. I got into it with one of their editors on a story they claimed was their own. I first pointed out that this story seemed to be word for word of another story on the Huffington Post site that was posted 3 days earlier than when it was posted on Yahoo. I posted up on the article on Yahoo under this so-called "author's" post with links to everything I just found out. This so-called "author" deleted my post because it showed that her entire story was based on plagiarism. I posted it several times talking to people in the comments and this so-called "author" had deleted every post of mine. This just pissed me off and I did what colleges/universities do with students essays when they grade them to see if the essays were original, or if they were plagiarized (illegally copied without permission from the owner). I copied the entire post of this so-called "author" and did this scan to find the same exact post word for word on a post from another "author" from the Huffington Post site, but it was posted 3 days before the time that this so-called "author" on Yahoo posted the story and claimed it as her own. The title was even the same. I posted the article anonymously on the Huffington Post site with the date it was posted on Yahoo, pointing out how this so-called "author" working for Yahoo had used plagiarism to try to claim credit for the story. This so-called "author" from Yahoo was fired and the last I heard, she is facing criminal charges and is being sued for plagiarism. Since this incident, I have noticed that the authors on Yahoo have either obtained permission from another author to use their material, or that they have been trying to put stories in their own words. They are failing horribly in the latter. Of course, Yahoo is owned by Google now and Google is losing people to more reliable companies like Microsoft since Windows 10 came out. I myself have stopped using Google Chrome today since it was getting so terrible. I will still use Yahoo as my comic relief and I will still use my Google+ profile, but with "Shadow Access" from now on. "Shadow Access" is using another thing for something instead of using the something for the something.

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Mohammed Abdul Jawad

Market Researcher at Pharmaceutical Solutions Industry

9 年

What does Ms. Marissa Mayer, Yahoo's President and CEO, says? Aren't there any comments?

回复
Kelly Spies

?? Insurance Broker & Agency Owner ???? Because??Cat Addicted, Empty Nesting, ?? Taco Guardian Isn't An Official Job Title. ?? I am the official Food Truck Freak - ? Queen of all things Food Truck Insurance related.

9 年

Yahoo's business model is to buy other small startups and kill them off before they become competition. They will never be as big a shark as they want to be with that as their business model.

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