- Tumblr's (YHOO -1.1%) Sponsored Post ads are set to begin appearing on Yahoo News, Yahoo Beauty, and other properties in the Web giant's empire.
- The ads will be offered via Yahoo's recently-launched Gemini ad marketplace, which integrates mobile search and native ad inventory. At the same time, Yahoo plans to phase out standard mobile banner ads, notorious for their low prices and accidental clicks.
- The effort is part of a push by Yahoo to shore up slumping display ad sales by embracing native ad formats. Healthy uptake for the company's Stream ads contributed to Yahoo's better-than-expected Q1 display numbers.
- Shares added to yesterday's losses amid continued worries about Alibaba's (ABABA) Q1. In addition to top-line concerns - calendar Q1 rev. growth was 39% Y/Y, down from the 66% reported (by Yahoo) for calendar Q4 - some are on edge over a 600 bps Y/Y drop in Alibaba's op. margin to 45.3%. Alibaba attributed the decline to higher Web/mobile marketing spend.
- MKM is reiterating a Buy and $45 PT for Yahoo. The firm states the Alibaba numbers only affect its Yahoo valuation framework by $0.50/share, and thinks shares could see "another leg" higher thanks to Alibaba's roadshow and post-IPO valuation.
- MKM chalks up Alibaba's near-term slowdown to mobile transition issues (i.e. a lower mobile take rate) that can be handled in time. It thinks mobile take rate is for now ~1/3 of PC levels.