Early Reactions to Yahoo's Q4 Earnings Results; Implications for Google? (YHOO, GOOG)

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Includes: GOOG, YHOO

Mylene Mangalindan, WSJ (paid sub req'd):

Some analysts worry that Google Inc. may be gaining at Yahoo's expense in search-related advertising specifically. "The broader trend is that Google is becoming synonymous with search," said Safa Rashtchy, a Piper Jaffray analyst. "People may question why go anywhere else." Mr. Semel disagreed. Yahoo has held share in the U.S., where Google has gained at the expense of other companies, he said in an interview. Google is ahead of Yahoo in Europe, but Yahoo is better positioned in Asia, one of the fastest-growing geographies, where it has been strong traditionally, he said.

Jonathan Thaw, Bloomberg:

In Internet search ads, Yahoo's share of the market fell to 19 percent in November, from 27 percent a year earlier, ComScore said. Google's share rose to 60 percent from 47 percent a year earlier. Google is scheduled to report quarterly results Jan. 31.

ClickZ:

In an effort to boost search, the company will overhaul its advertiser interface, Semel said, so users can "buy more keywords, test more creative and add more listings faster." The company is also working to improve relevance and click-through for search ads. Yahoo! this week is rolling out shorter creative lengths in a bid to boost click-through.

Roger Nusbaum:

Both Intel and Yahoo had bad earnings reports. This is likely to have a palpable impact for several days. Several days? It is probably a good bet that Yahoo (client holding) will see $40 in our lifetime, or more likely, before Valentine’s Day... Yahoo is a long term holding for most clients. While I was writing this post I bought some stock personally at $35.50. For the first $0.34 I am wrong. Hopefully the next few weeks are better.

Stockcoach Blog:

I picked up 300 shares of YHOO afterhours at $35.28. I think the drop after the close was too extreme considering they didn't miss estimates by a wide margin. I'm hoping that institutional buying tomorrow morning will propel the stock to the mid-36 range, where I plan to take my profit. Considering that the stock kept sliding in afterhours after I bought it, my theory may turn out to be wrong, but live and learn.

John Mugarian:

So that's why the Yahoo (NASDAQ:YHOO) insiders have been selling. After the bell Internet giant Yahoo said fourth quarter profits doubled, but missed analysts' forecasts by a penny. In after-market trading, Yahoo is trading down $5.36 or 13%. Whenever a stock is priced for perfection, this is what usually happens.

Jonathan Berr, TheStreet.com

"There is nothing there that is a particular problem," says Martin Pyykonnen, an analyst with Hoefer & Arnett who rates the shares strong buy and doesn't own them. "It's about beating expectations and coming out ahead, and they didn't do that."