Tue, Apr. 21, 2:22 AM
- According to a new filing, Yahoo (NASDAQ:YHOO) and Microsoft (NASDAQ:MSFT) have amended the terms of their 10-year search pact to allow either party terminate their agreement at any point in time on or after Oct. 1.
- Under the original deal, which began in February 2010, Yahoo could only terminate the pact if the revenue from each search failed to meet certain financial-performance benchmarks.
- The two also restructured the agreement's search terms last week, stating the partnership is non-exclusive for both desktop and mobile.
- Yahoo reports earnings after the bell today.
- Previously: Microsoft, Yahoo restructure search pact; no PC/mobile exclusivity (Apr. 16 2015)
Mon, Apr. 20, 5:35 PM
Thu, Apr. 16, 9:48 AM
- Following months of talks, Yahoo (YHOO +0.2%) and Microsoft (MSFT -0.4%) have restructured their search alliance (struck in 2009, lasts until 2020). Notably, Yahoo will "now have increased flexibility to enhance the search experience on any platform, since the partnership is non-exclusive for both desktop and mobile."
- The companies previously disclosed the alliance was non-exclusive on mobile, but hadn't announced anything similar for PCs. They now only state Yahoo "will continue to serve Bing ads and search results for a majority of its desktop search traffic."
- At the same time, Microsoft will now "become the exclusive salesforce for ads delivered by Microsoft's Bing Ads platform." Yahoo will continue exclusively providing the salesforce for its Gemini mobile search/native ad platform.
- "Satya [Nadella] and I have worked closely together to establish a revised search agreement that allows us to enhance our user experience and innovate more in our search business," says Marissa Mayer, who has previously voiced disappointment about the performance of the Microsoft deal.
- The deal has required Microsoft to make revenue per search (RPS) guarantees equal to a % of Google's estimated RPS. Thanks to RPS payment changes, Yahoo's search revenue (ex-TAC) was flat Y/Y in Q4, even though its search click-based revenue (excludes RPS payments) was up 18%.
- The restructuring follows a deal by Yahoo to displace Google as Firefox's default U.S. search provider, and comes amid reports Yahoo/Microsoft are trying to sell Apple on replacing Google as Safari's default provider (including on iOS). comScore estimates Bing had a 20.1% March U.S. PC search share, and Yahoo a 12.7% share; international shares are lower.
Wed, Apr. 15, 11:06 AM| 1 Comment
Wed, Apr. 15, 10:00 AM
- TechCrunch reports hearing Yahoo (YHOO - unchanged) is in talks to buy local check-in/search platform Foursquare, possibly for ~$900M.
- One source states a "deal is done," and others also report hearing of talks. However, TechCrunch cautions other Yahoo sources haven't heard anything, and notes this isn't the first time rumors of a deal have popped up.
- Foursquare was valued above $600M in a 2014 funding round featuring Yahoo search partner Microsoft. It owns a valuable location check-in database - Foursquare has handled 7B check-ins from 55M people over its lifetime - that could further Yahoo's local services/ad efforts, and its apps would extend Yahoo's mobile reach.
- At the same time, competition from Facebook, Yelp, and Google's services has taken a toll. In an attempt to stem the tide, Foursquare moved its check-in services into a separate app called Swarm last year, while keeping local search in its core app. However, Swarm has seen only modest uptake.
- Yahoo has made a string of big acquisitions in the Marissa Mayer era, but has been quiet for the last several months. Major 2014 deals included video ad platform BrightRoll and mobile analytics/ad platform Flurry.
- Update: CNBC and the WSJ state Yahoo isn't in talks to buy Foursquare.
Fri, Apr. 10, 5:27 PM
- Mike Kerns, Yahoo's (NASDAQ:YHOO) SVP of homepage & verticals, has left the company. Kerns, promoted to SVP in 2013, was responsible for the redesign of Yahoo's homepage and many vertical sites (News, Sports, TV, Weather, and Games, among others).
- Nicholas Carlson (author of a well-publicized book on Marissa Mayer) reports Kerns was "a favorite" of Mayer's for a long time. But he adds Kerns was (per a source) tasked in Q2 2014 with building a subscription video business (previous) that hasn't yet materialized, and "did not always love Mayer's way of running Yahoo."
- Kerns' departure comes ahead of Yahoo's April 21 Q1 report, and shortly after The Information reported Mayer is planning a reorg that (among other things) could result in mobile product chief Adam Cahan taking control of video products from Kerns, and in Flurry CEO Simon Khalaf being promoted to SVP.
- Update: The NYT reports Yahoo made the reorg official today. Khalaf has been named an SVP and will "oversee many of the company’s consumer-facing products, including the Yahoo home page, its portals devoted to themes like sports and movies, and related Yahoo apps." Cahan will oversee Yahoo's video efforts. Tumblr chief David Karp will report to Khalaf.
Wed, Apr. 8, 1:48 PM
- Alibaba is up 3.7% thanks to a big Chinese Internet stock rally, and Yahoo (NASDAQ:YHOO) isn't getting left out of the fun. The company's 384M-share Alibaba stake is currently worth $32.7B.
- Meanwhile, The Information reports Marissa Mayer is planning a big reorg that could reduce Tumblr's independence. Mayer has reportedly asked Tumblr founder/CEO David Karp which Yahoo SVP he'd like to report to.
- A likely reason for the shakeup: The Information states Tumblr, which has continued seeing strong traffic growth since Yahoo's 2013 acquisition of the blogging platform, is unlikely to hit a $100M 2015 revenue target. Tumblr has been busy launching new ad formats, but some brands have been nervous about running ads against its content.
- Also: Mobile product chief Adam Cahan might assume control of video products, and Simon Khalaf, CEO of leading mobile analytics platform Flurry (acquired last year) is reportedly being promoted to SVP, and could assume responsibility for Tumblr.
Fri, Mar. 27, 7:09 PM
- Yahoo (NASDAQ:YHOO) "offers an attractive way to buy BABA at a 20% discount to current levels, or 21x [estimated 2016] EPS," writes Morgan Stanley's Brian Nowak (formerly with Susquehanna), who has launched coverage on Yahoo with a Buy rating and $55 target.
- MS/Nowak sees Alibaba's earnings growth accelerating to 37% in 2016 after totaling just 9% in 2015 (due to near-term margin pressures caused by aggressive spending). On that basis, he backs Morgan Stanley's $102.30 Alibaba target (set by fellow analyst Robert Lin), and values Yahoo's Alibaba stake, due to be spun off tax-free this year, at $38/share. Based on today's close of $84.58, the stake would be valued at ~$31.40/share.
- After factoring the Yahoo Japan stake, net cash, and core Yahoo, Nowak reaches a $55 sum-of-the-parts valuation. He expects core Yahoo to continue losing display and search ad share, but notes it's worth $5/share even if valued at just 4.5x estimated 2016 EBITDA.
- Thanks to yesterday afternoon's buyback announcement, Yahoo rose 1.4% today to $45.10. After the close, Yahoo disclosed it has extended the deadline for renegotiating its Microsoft search deal by 30 days. The deal lasts until 2020, but gives Yahoo the right to terminate if (among other things) its trailing 12-month U.S. revenue per search (RPS) falls below a % of Google's estimated trailing 12-month U.S. RPS (excluding mobile).
Thu, Mar. 26, 5:27 PM
- Making Starboard Value happy, Yahoo (NASDAQ:YHOO) has added $2B to be its buyback authorization, raising its total available funds to $2.73B (good for repurchasing over 6% of outstanding shares at current levels). (8-K filing)
- The new buyback funds are good until March 31, 2018. Yahoo used part of its Alibaba IPO windfall to buy back $980M worth of shares in Q4, and has spent $9.7B on buybacks since Q2 2012. The company had $10B in cash/marketable securities at the end of 2014, and $1.17B in convertible debt.
- YHOO +1.4% AH to $45.09.
Tue, Mar. 24, 3:54 PM
- Buyback-happy U.S. firms are prohibited from repurchasing shares from about five weeks prior to releasing quarterly earnings to about 48 hours after those reports. These blackout periods, says Goldman, may offer an especially tasty time for investors to pick up shares of their favorites.
- "High valuations in the absence of corporate demand may weigh on stock prices," says Goldman's Amanda Sneider, and particular areas of focus are tech, consumer discretionary, and financials - they've accounted for more than 50% of buyback activity.
- Goldman's buyback blackout theme buys: SanDisk (NASDAQ:SNDK), Yahoo (NASDAQ:YHOO), Travelers (NYSE:TRV), Apple (NASDAQ:AAPL), Juniper Networks (NYSE:JNPR), Xerox (NYSE:XRX), Torchmark (NYSE:TMK), F5 Networks (NASDAQ:FFIV), Citrix Systems (NASDAQ:CTXS), Aon (NYSE:AON), Moody's (NYSE:MCO), VeriSign (NASDAQ:VRSN), Hartford Financial (NYSE:HIG), Ameriprise (NYSE:AMP), Corning (NYSE:GLW), Time Warner (NYSE:TWX), Seagate Technology (NASDAQ:STX), Viacom (NASDAQ:VIAB), Legg Mason (NYSE:LM), XL Group (NYSE:XL), DirecTV (NASDAQ:DTV), Allstate (NYSE:ALL), Nvidia (NASDAQ:NVDA), CBS (NYSE:CBS), Macy's (NYSE:M), Kohl's (NYSE:KSS).
Wed, Mar. 18, 6:18 PM
- Yahoo (NASDAQ:YHOO) is "withdrawing its remaining operations in China, laying off between 200 and 300 employees and shutting down its Beijing research center," a source tells the WSJ. A layoff of 250 employees would be equal to 2% of Yahoo's global workforce of 12.5K.
- The pullback is part of a broader cost-cutting effort that thus far has resulted in 700-900 layoffs occurring since October (mostly outside the U.S.). Yahoo was reported in October to be cutting 400 Indian jobs.
- In addition to pushing for an AOL merger and larger buybacks, activist Starboard Value has been urging Yahoo to cut costs by as much as $500M/year.
- Not counting its Alibaba stake, Yahoo has a limited presence in a Chinese Web services space dominated by local firms. The company's total Asia-Pac revenue fell 7% Y/Y in Q4 to $180M; it bailed out of South Korea back in 2012.
Tue, Mar. 17, 3:52 AM
- Employees and investors will be able to sell 337M Alibaba (NYSE:BABA) shares starting Wednesday, after the stock's first "lock-up" arrangement expires.
- The termination of the 180-day period will likely weigh on Alibaba’s share price, which may come under pressure in the near-term, analysts say.
- There are different lock-up periods for different shareholders, and stock held by its largest shareholders - Softbank (OTCPK:SFTBY), Yahoo (NASDAQ:YHOO) and Alibaba executives - will be frozen until the company's IPO anniversary in September.
- BABA -0.2% AH
Mon, Mar. 16, 10:56 AM
- Alibaba (NYSE:BABA) is up sharply in early trading after Chinese premier Li Keqiang suggested (amid slowing GDP growth) fresh stimulus efforts will be launched if needed, sparking a 2.1% overnight rally for the Shanghai exchange. Yahoo (NASDAQ:YHOO) is naturally following Alibaba higher.
- The gains come two days before a massive 437M-share lockup expiration arrives. 100M of the shares are subject to employee trading restrictions that will remain in place until Alibaba's FQ4 report (expected in May) is released.
- Short-covering could be aiding today's gains: Alibaba had 56.9M shares shorted as of Feb. 27, the highest figure recorded since a September IPO in which 368M shares were sold.
Sat, Mar. 14, 8:00 AM
- Sony Pictures Television (NYSE:SNE) is within a few weeks of a deal to sell the episode library of hit '90s sitcom Seinfeld to a video streaming service: Hulu (CMCSA, DIS, FOXA), Yahoo (NASDAQ:YHOO), or Amazon.com (NASDAQ:AMZN), and thus maybe to a whole new generation of viewers.
- Netflix (NASDAQ:NFLX) won't be among them, though, as it's passing -- which gives competitors a chance to nab a TV crown jewel and make up some ground in a content-acquisition arms race.
- Seinfeld -- a show that has generated more than $2.7B in syndication sales alone -- has 180 episodes, each of which should draw well over $500K in what should be a long multi-year agreement.
- While Sony has distribution rights and is making the deal, most of the revenue would likely go to Time Warner (NYSE:TWX), owner of Seinfeld producer Castle Rock Entertainment.
- Previously: Now a friendly deal between Time Warner and Netflix (Oct. 15 2014)
- Previously: CBS next to join Sony's online TV service (Nov. 06 2014)
- Previously: Bernstein: Amazon spending $2.5B+ on content next year (Oct. 13 2014)
Wed, Mar. 4, 1:58 PM
- A day after slumping to new post-IPO lows and coming within $0.03 of $80, Alibaba (NYSE:BABA) has seen dip-buyers emerge in large numbers. Naturally, Yahoo (NASDAQ:YHOO) is along for the ride.
- The gains come as a Chinese publication reports Jack Ma once said he considered acquiring Yahoo, which plans to spin off its Alibaba stake into a publicly-traded company in Q4. Ma's alleged comments: "The acquisition of Yahoo is something I worked [on] a couple of years ago, this is a political problem, not an economic problem, Yahoo is a media [company], more sensitive."
- There has already been speculation Alibaba will try to buy Yahoo's spinoff (much less politically challenging than buying the whole of Yahoo) at some point. Bloomberg's Matt Levine has noted the spinoff will have to wait a year before a deal occurs, in order to maintain its tax-free status.
- Meanwhile, Alibaba's Aliyun cloud services unit (a giant in the Chinese cloud infrastructure market) has opened a Silicon Valley data center, its first in the U.S. For now, the data center will cater to Chinese companies with U.S. operations, but it plans to go after non-Chinese clients later this year. When it does, Amazon (NASDAQ:AMZN), Google (NASDAQ:GOOG), Microsoft (NASDAQ:MSFT), and a slew of other incumbents will be waiting.
Tue, Mar. 3, 1:46 PM
- Alibaba (BABA -3.3%) has slumped to new post-IPO lows on a down day for equities, and at one point was just $0.03 above $80. Shares remain 19% above their $68 IPO price.
- Yahoo (YHOO -3.8%), which has seen the value of its 384M-share Alibaba stake (set to be spun off) fall to $31.1B, is following Alibaba lower. Yahoo's market cap stands at $41B.
- Possibly hurting Alibaba: The WSJ has taken a look at the use of fake orders (i.e. "brushing) by Alibaba merchants to pad their sales and thereby boost their standing on the company's marketplaces.
- Merchants pay "brushers" to place orders, and then ship them boxes that are empty or full of worthless items. A November column from China's state-owned Xinhua News Agency estimated 17% of sellers (1.2M) on Alibaba's Taobao site (focused on smaller merchants) had faked RMB10B ($1.6B) worth of transactions in 2013.
- Alibaba says it punishes sellers found to be faking transactions, and analyzes IP and mailing address data to spot anomalies. Chinese regulator SAIC recently issued a report criticizing Alibaba for fake goods listings and other illegal business done on its sites, but backtracked after Alibaba blasted the report.
- The Chinese e-commerce giant now trades for 28x estimated FY16 (ends March '16) EPS. The FY16 revenue growth consensus is at 36%.
- Update: Bloomberg suggests JD.com's strong Q4 numbers could be fueling concerns Alibaba is losing share. JD's GMV rose 119% Y/Y in calendar Q4 to $13.8B; Alibaba's rose 49% to $125.9B.
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