Thu, Jan. 29, 9:37 AM
- Alibaba's (NYSE:BABA) FQ3 GMV rose 49% Y/Y to RMB787B ($125.9B). However, its monetization rate (revenue as a % of GMV) fell 35 bps Y/Y to 2.7%, leading revenue growth to only reach 40%. By contrast, monetization rate fell just 1 bps (to 2.30%) in FQ2.
- A major culprit: Mobile grew to 42% of GMV from 36% in FQ2 and 20% a year ago. And the mobile monetization rate (1.96% vs. 1.87% in FQ2 and 1.12% a year ago) remains well below the total rate. Mobile was 30% of revenue vs. 42% of GMV.
- A bright spot: EBITDA rose 34% Y/Y to $2.43B, better than expectations for 24% growth and driving the EPS beat. Heavy spending led EBITDA margin to slip to 58% from 60% a year ago. With stock compensation spend (IPO-driven) rising to 16% of revenue from 4%, and new business initiatives growing, operating expenses rose to 33% of revenue from 30%, and gross margin fell to 71% from 78%.
- China commerce revenue +32% to $3.6B (a slowdown from FQ2's 47%); international commerce (AliExpress-driven) +39% to $284M; cloud computing/infrastructure +85% to $58M; everything else (boosted by acquisitions) +266% to $309M.
- Taobao GMV (driven by smaller merchants) +43% to $80B; Tmall GMV (driven by larger merchants) +60% to $47B. Annual active buyers rose to 334M from 307M in FQ2 and 231M a year ago.
- Yahoo (NASDAQ:YHOO) is following Alibaba lower, and is now down 9% since posting Q4 results and announcing its spinoff plans.
- Alibaba's FQ3 results, PR
- Related tickers: OTCPK:SFTBF, OTCPK:SFTBY
Thu, Jan. 29, 9:12 AM
Wed, Jan. 28, 12:40 PM
- After having surged above $51 in AH trading yesterday, Yahoo (YHOO +1.7%) is back below $49 today after beating Q4 estimates, providing light Q1 guidance, and unveiling plans for a tax-free spinoff of its Alibaba stake.
- Hurting Yahoo's cause: Alibaba (NYSE:BABA) is selling off in the wake of the spinoff news - by proxy, Yahoo's SpinCo increases the supply of Alibaba shares - and criticism from Chinese regulators about illicit goods sold on its sites.
- The spinoff has triggered speculation Alibaba could buy back the spinoff shares to lower its share count and/or simplify its share structure. However, as Bloomberg's Matt LeVine observes, to maintain the SpinCo's tax-free status, Yahoo can't have a pre-arranged agreement to sell it back to Alibaba, and the SpinCo will have to wait a year before selling itself. "Until then, SpinCo ought to trade at a discount to Alibaba, since it's just Alibaba plus a tax liability."
- SunTrust's Bob Peck has raised his Yahoo target by $4 to $61. He notes (Alibaba-funded) buybacks have lowered share count by 13% since Q1 2013, and likes CFO Ken Goldman's Yahoo Japan remarks.
- Evercore's Ken Sena estimates the spinoff yields $16/share in tax savings. He values the SpinCo at $48/share, assuming Alibaba trades at the midpoint of current levels and Evercore's $130 target.
- Alibaba reports tomorrow morning.
- Update: Yahoo closed down 3.2%. Alibaba closed down 4.4%.
Tue, Jan. 27, 7:00 PM
- Yahoo (NASDAQ:YHOO) has guided in its Q4 earnings slides (.pdf) for Q1 revenue (ex-TAC) of $1.02B-$1.06B, below a $1.1B consensus. Adjusted EBITDA is expected to fall to $200M-$240M from $306M a year earlier, and op. income to $50M-$90M from $149M.
- The company used its Alibaba IPO windfall to buy back $980M worth of shares in Q4 at an average price of $45.26 (contributed to the EPS beat). $9.7B have been bought back since Q2 2012.
- Q4 search revenue (ex-TAC) was nearly flat Y/Y at $462M, after rising 6% in Q3. However, search click revenue (excludes Microsoft payments) rose 18%, driven by a 10% increase in paid clicks and a 7% increase in price per click.
- Display revenue (ex-TAC), still hurt by share loss and the transition to native ads, fell 5% to $464M. Ads sold rose 17%, but price per ad fell 20%. All other revenue rose 2% to $253M.
- Americas revenue was flat Y/Y at $913M. EMEA fell 7% to $87M, and Asia-Pac 7% to $180M. Operating expenses rose 6% to $923M.
- On the CC, CFO Ken Goldman says Yahoo didn't include its Yahoo Japan (OTCPK:YAHOF) stake in the Alibaba spinoff in order to keep the transaction simple, but hints some other move could be on tap. "We are not saying we will not do something."
- Marissa Mayer says Yahoo is talking with Microsoft about the terms of the companies' search alliance; Mayer has made it clear more than once she's not happy with its performance. Not surprisingly, she also suggests Yahoo would love to displace Google (previous) as Apple's Safari search provider.
- YHOO +7.4% AH. Q4 results, Alibaba announcement.
Tue, Jan. 27, 5:35 PM
Tue, Jan. 27, 4:14 PM
- Along with its Q4 results, Yahoo (NASDAQ:YHOO) announces its board has "authorized a plan for a tax-free spin-off of the company's remaining holdings in Alibaba Group (NYSE:BABA) into a newly formed independent registered investment company (SpinCo)."
- Shares in the SpinCo will be "distributed pro rata to Yahoo shareholders, resulting in SpinCo becoming a separate publicly traded company." After the spinoff, Yahoo will own its core business and a 35.5% stake in Yahoo Japan. SpinCo will assume no debt in the deal, and Yahoo will retain its cash.
- The spinoff is expected to be completed in Q4 2015, after a one-year lockup on Yahoo's Alibaba stake expires.
- Yahoo's 384M-share (15%) Alibaba stake has a current market value of $39.5B. The company closed today with a total market cap of $46.7B.
- Yahoo has jumped to $51.08 in AH trading. Alibaba is fractionally higher.
Tue, Jan. 27, 4:06 PM
Mon, Jan. 26, 5:35 PM
Fri, Jan. 16, 2:23 PM
- Prashant Fuloria, formerly the product chief at mobile ad/analytics firm Flurry (acquired by Yahoo last summer), will now oversee all of Yahoo's (YHOO +0.4%) ad products, according to a memo from Marissa Mayer.
- Scott Burke, Yahoo's long-time SVP of ad technology, will report to Fuloria. As will Tod Sacerdoti, the founder/CEO of recently-acquired video ad platform BrightRoll. Fuloria will report directly to Mayer.
- The shakeup comes ahead of Yahoo's Jan. 27 Q4 report. The company's display ad revenue, hurt by share loss to Facebook/Google and a transition to native ad formats (e.g. news stream ads) from traditional banner ads, fell 6% in Q3 to $396M. Search ad revenue rose 6% to $450M.
Thu, Jan. 8, 11:39 AM
- Though Marissa Mayer (NASDAQ:YHOO) is reportedly uninterested in a deal and Tim Armstrong (NYSE:AOL) has dismissed the M&A speculation swirling around his company, activist Starboard Value is once more reiterating its call for a Yahoo/AOL merger.
- Starboard argues a merger would yield cost synergies of $1B-$1.5B/year, help Yahoo carry out "a tax-efficient separation" of its Alibaba/Yahoo Japan stakes, and create "a strong growth platform given AOL's progress in mobile and video advertising."
- The firm also says it's "increasingly concerned" about reports stating Yahoo is thinking of making a big media acquisition with its Alibaba IPO proceeds. In addition, it's not happy with speculation Yahoo is "considering a cash-rich split-off as a structure to separate its non-core minority equity interests," rather than "a spin-off structure or other available alternatives to unlock the full value of the stakes in Alibaba and Yahoo Japan."
- Yahoo has said it will offer more details about its plans to tax-efficiently monetize its remaining Alibaba stake during its Q4 earnings CC (set for Jan. 27).
- Both Yahoo and AOL are rallying. The Nasdaq is up 1.7%.
Thu, Jan. 8, 4:43 AM
- "There's always speculation around us because we have taken a company that was not doing well and ended 2014 with two straight years of growth," announced AOL (NYSE:AOL) chief executive Tim Armstrong, dismissing talks of possible mergers.
- The company had recently been linked to rumors of a possible joint venture with Verizon (NYSE:VZ) and a merger with Yahoo (NASDAQ:YHOO).
- Previously: Verizon CEO throws cold water on AOL acquisition rumor (Jan. 06 2015)
Thu, Jan. 8, 3:16 AM
- Google’s (NASDAQ:GOOG) slice of the U.S. search market, excluding mobile devices, fell to 75.3% last month from 77.5% in November, while Yahoo's (NASDAQ:YHOO) share jumped to 10% from 8%, according to analytics firm StatCounter.
- The changes were spurred by a deal in November where Yahoo replaced Google as the default search engine on Firefox browsers in the U.S.
- Google is also facing potentially larger losses on mobile devices amid reports that Apple is considering dropping it as the default search provider on its Safari browser.
Tue, Jan. 6, 2:05 PM
- A fresh rumor that Carl Icahn is buying a stake in Twitter (NYSE:TWTR) has led shares to rally in spite of a broad market selloff. An Icahn/Twitter rumor also broke out in 2013.
- Yahoo-related speculation might also be helping Twitter's cause. Ex-Yahoo CEO Ross Levinsohn declared on CNBC Twitter should acquire Yahoo's (NASDAQ:YHOO) core business - most of the company's market cap is tied to its Alibaba/Yahoo Japan stakes - and SunTrust's Bob Peck offered ten reasons why he thinks a Yahoo/Twitter merger makes sense.
- Among Peck's arguments: Twitter could integrate its display and mobile ad platforms with Yahoo's; both companies claim strong news, sports, finance, and entertainment audiences; Twitter's short-form content could be matched with Tumblr's longer-form material; and Twitter's interest graph data could be paired with Yahoo's demographic data for ad targeting purposes.
- In terms of growth profiles and valuations, Twitter and core Yahoo are very different entities.
Fri, Jan. 2, 9:35 AM
- "For sure, [Marissa] Mayer and Yahoo (YHOO +0.3%) considered acquiring Scripps Networks (SNI +2.7%)," writes BI's Nicholas Carlson, citing two sources. He also reports hearing from a media industry source there were "pretty active" rumors during the summer that Yahoo, which just received an Alibaba IPO windfall, wanted to buy CNN (NYSE:TWX).
- Carlson, whose critical NYT Magazine column on Mayer (adapted from a new book) has drawn plenty of attention, reports Yahoo initially entered into talks with Scripps to acquire The Food Network, and that "the possibility that Yahoo might acquire all of Scripps" later entered into the discussion. Aside from The Food Network, Scripps owns the Travel Channel, HGTV, and DIY Network.
- Among the reported reasons for Yahoo's interest in Scripps: Many of its media brands cater to women "25 or 35 and older" (a key Yahoo demographic); Scripps has very brand advertiser-friendly content; Yahoo could distribute its original content across Scripps' platforms; and Yahoo's salesforce could offer joint TV/Web ad packages.
- A deal for The Food Network alone is arguably more plausible than one for the whole of Scripps, given: 1) Scripps has a $10.6B valuation, and could cost several billion more to acquire. 2) Yahoo hasn't made any giant media acquisitions during the Mayer era, and has instead focused its content investments on financing original material and hiring well-known media personalities (such as Katie Couric and David Pogue).
- Update: Variety reports Yahoo has "mulled buying Food or other Scripps properties internally," but adds the company "has not — either formally or informally — ever [approached] SNI about a potential deal."
Dec. 29, 2014, 3:08 AM
- Yahoo (NASDAQ:YHOO) is targeting the growth of wearables and other mobile devices to cash in on their expected exponential future growth, FT reports.
- The company has already broken into the wearable market with its version of Yahoo News Digest for the Apple Watch.
- In addition to its development of apps for mobile devices, Yahoo has not ruled out creating its own wearable, says Adam Cahan, senior vice-president of mobile.
Dec. 23, 2014, 7:07 PM
- Yahoo's (NASDAQ:YHOO) $1.1B acquisition of Tumblr is looking like a "home run" purchase, argues Topeka's Victor Anthony, hiking his target by $3 to $60 and reiterating a Buy.
- Anthony cites a slew of positive metrics. "As of 3Q, Tumblr had 420M users (+40% since purchase), some of which are logout-out users, and the number of registered blogs is now 215.6M, up from 105M at purchase. Monthly mobile users are growing 50% YoY and time spent of registered users has grown from 22 minutes to 28 minutes."
- He adds over 260 brands are now spending on Tumblr, and that the blogging platform "over-indexes on teens relative to other social media platforms." Yahoo stated on its Q3 CC Tumblr is expected to have 2015 revenue of over $100M, and generate positive EBITDA.
- Meanwhile, a weekend NYT Magazine column (adapted from a new book) by Nicholas Carlson on Marissa Mayer's time at Yahoo continues to draw attention. Among other things, Carlson offers a critical view of Mayer's hiring practices and media/ad skills, and of her perceived attempts to run Yahoo as a growth company rather than as an established, slow-growing, tech firm.
- Yahoo fell 2.2% in regular trading, thanks to Alibaba's 3% drop.
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