Seeking Alpha

Yahoo! Inc. (YHOO)

  • 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.
  • Dec. 12, 2014, 10:54 AM
    • Hortonworks (NASDAQ:HDP) opened at $24 and is now at $24.13, up 50.8% from its $16 IPO price.
    • Hortonworks, one of the two most prominent developers (along with Intel-backed Cloudera) of software distributions for the Hadoop big data framework, is now worth just over $1B, or ~15x gross billings from the 12 months ending Sep. 30.
    • Yahoo's (YHOO +1.1%) 7.6M-share (16.8%) stake is worth $183M. Teradata's (TDC -1.4%) 2.9M-share (7%) stake is worth $70M.
    • Prospectus, IPO analysis
    • Prior Hortonworks coverage
  • Dec. 5, 2014, 9:16 AM
    • While downgrading Google to Neutral, BofA/Merrill's Justin Post has upgraded Yahoo (NASDAQ:YHOO) to Buy, and hiked his target by $7 to $62.
    • Post: "While Yahoo continues to lose US online ad share (from 7% in 2013 to 6.2% in 2014E and 5.6% in 2015E), we are upgrading Yahoo to Buy from Neutral based on Alibaba and tax upside potential."
    • He adds CFO Ken Goldman has suggested Yahoo remains optimistic about "finding a promising tax solution" for monetizing its remaining 384M-share Alibaba stake (previous), and plans to detail its plans during its Q1 earnings call.
    • Yahoo's Alibaba stake currently has a pre-tax value of $41.9B. Several firms hiked their targets in November.
  • Nov. 26, 2014, 4:53 AM
    • Netflix (NASDAQ:NFLX) is suing its former vice president of IT operations Mike Kail, who left the company in August to become chief information officer at Yahoo (NASDAQ:YHOO).
    • The suit says that Kail arranged Netflix contracts with IT service companies Vistara and NetEnrich, and then pocketed commissions of 12%-15% of the monthly fees Netflix paid each company.
  • Nov. 25, 2014, 1:13 PM
    • The Information reports Yahoo (YHOO - unchanged) and search partner Microsoft (MSFT +0.5%) are aggressively trying to sell Apple on replacing Google (GOOG +0.6%) as the default search engine for the Safari browser (pre-installed on all iOS/Mac OS hardware) when its Google deal expires in 2015.
    • Apple, which naturally views Google as a major rival, already dropped Google as iOS and Mac OS' Spotlight search provider this year in favor of Bing. Yahoo, meanwhile, is less than a week removed from announcing it has displaced Google as Firefox's default U.S. search provider; Google is still the default provider in Europe.
    • The Firefox deal suggests Google is willing to walk away from default search agreements if Yahoo/Microsoft (hungry to grow their scale) significantly undercut its revenue-sharing terms, betting much of its base will keep using Google regardless. Macquarie has estimated Google provides Apple with a 75% cut on Safari-driven iOS search ad revenue.
    • On iOS, users could keep relying on Google search in the event of a Yahoo deal by manually selecting Google as their Safari search option (should Yahoo become the default), or by using Google's popular search and Chrome apps. StatCounter estimates Google had a 92.2% October mobile/tablet search share to Yahoo and Bing's combined 6.5%.
  • Nov. 25, 2014, 3:38 AM
    • Yahoo's (NASDAQ:YHOO) new move to begin selling canvas prints of Flickr photos is stirring controversy within the Flickr community.
    • Yahoo said last week that it would begin selling the prints of 50M Creative Commons-licensed images as well as an unspecified number of handpicked photos from Flickr.
    • For handpicked photos, the company will give 51% of sales to their creators, but Yahoo will keep all of the revenue for sales of Creative Commons images.
    • Many contributors are not happy about the new move, while other amateur photographers are pleased by the new publicity.
  • Nov. 19, 2014, 5:20 PM
    • Per the terms of a new 5-year deal with Mozilla, Yahoo (NASDAQ:YHOO), whose search engine is powered by Bing (NASDAQ:MSFT), will provide "the default search experience for Firefox in the United States on mobile and desktop." The deal also "provides a framework for exploring future product integrations and distribution opportunities to other markets."
    • No word on revenue-sharing terms. Google (NASDAQ:GOOG) has long been Firefox's default search provider. Google's deal was last renewed in 2011, apparently on more favorable terms to Mozilla.
    • Though its browser share has fallen in recent years, thanks to both Chrome's gains and a relatively weak mobile position, StatCounter estimates Firefox still has a 12% combined PC/mobile/console browser share globally. Chrome's share is at 41%, and Internet Explorer's at 13%.
    • StatCounter puts Yahoo and Bing's combined global search share at just 7.4%. However, comScore puts their combined U.S. PC search share at 29.8%.
    • YHOO +0.8% AH.
  • Nov. 19, 2014, 4:11 PM
    • Yahoo (YHOO) "has been ferreting away over the past few weeks on several more big acquisitions, largely aimed at helping its flagging display business," Kara Swisher reports. Well-funded ad tech startups MediaMath, RadiumOne, and Turn are reportedly among the targets being considered.
    • All three companies operate in the fast-growing market for programmatic (automated) ad buys, which presents challenges for Web publishers such as Yahoo to go with opportunities. RadiumOne was once believed to be hatching IPO plans.
    • The ink is barely dry on Yahoo's $640M deal to buy video ad tech platform BrightRoll, whose advertiser-facing solutions include a programmatic buying platform. Four months ago, Yahoo struck a deal to buy Flurry, a provider of mobile analytics tools and an in-app ad network.
    • Swisher also reports Yahoo has hired consulting giant McKinsey and "a spate of banks" (including Goldman and JPMorgan) to advise it as it continues exploring options to tax-efficiently monetize its Alibaba/Yahoo Japan stakes.
  • Nov. 17, 2014, 3:38 AM
    • Amid a campaign to merge AOL (NYSE:AOL) and Yahoo (NASDAQ:YHOO), activist investor Starboard Value has revealed that it bought a 2.4% stake in AOL in the third quarter.
    • Starboard also took a stake in Yahoo during the same period, urging CEO Marissa Mayer to consider a combination of the two companies.
    • Starboard has disclosed the size of its position in Yahoo, listing 7.7M shares, or about a 0.8% stake, putting it just outside the list of top 10 shareholders in the company.
    • Previously: Activist Starboard takes stake in Yahoo, calls for AOL merger
  • Nov. 14, 2014, 3:12 PM
    • Oppenheimer has hiked its Yahoo (YHOO +2.1%) target by $12 to $61, and FBR has hiked its target by $10 to $60. Shares have made new highs, and (with a big assist from Alibaba) are now up 27% YTD.
    • FBR's William Bird: "YHOO offers a lower-cost play on Alibaba with the potential for improved core Yahoo performance as new initiatives (i.e., mobile, native, social, and video) likely start to overcome core display pressure."
    • His new target (naturally) reflects Alibaba's post-IPO rally, partly offset by expectations of lower buybacks (due to a higher stock price) and a slight reduction to his sum-of-the-parts valuation due to the BrightRoll deal.
    • Two days ago: Yahoo, Alibaba rally following (more) bullish notes
  • Nov. 12, 2014, 1:15 PM
    • Much as they did a week ago, Yahoo (YHOO +2.8%) and Alibaba (BABA +3.7%) are rallying following upbeat Street commentary. BofA/Merrill and UBS have hiked their Yahoo targets in the wake of the BrightRoll deal, BMO and SunTrust have offered positive remarks about Alibaba's Singles Day performance, and HSBC has launched coverage on Alibaba at Overweight.
    • BofA/Merrill's Justin Post argues BrightRoll "should enhance Yahoo’s video ad serving capabilities and put the company in a more competitive position with Facebook’s LiveRail, AOL’s and YouTube." His target has been hiked by $7 to $55.
    • SunTrust's Robert Peck thinks Alibaba's Singles Day revenue may have risen 65% Y/Y. He also expects the company's mobile monetization rate (up strongly in FQ2, though still below PC levels) to rise again in FQ3, aided by "Tmall growth and strong ROIs for mobile ads on Taobao."
  • Nov. 12, 2014, 3:10 AM
  • Nov. 11, 2014, 4:58 PM
    • "BrightRoll is a large, growing and profitable business with net revenues expected to exceed $100 million this year," says Yahoo (NASDAQ:YHOO) as it announces its acquisition of the video ad platform. The deal is expected to close in Q1 2015.
    • Yahoo notes BrightRoll's programmatic (automated) ad platform handles ad-buying for 87 AdAge Top 100 U.S. advertisers, as well as all of the top 10 demand-side (advertiser-facing) online ad platforms. Meanwhile, BrightRoll's publisher-facing offerings monetize ad inventory for "tens of thousands" of sites/apps.
    • Yahoo, hungry for some time to grow its video ad scale and put an end to its display ad revenue declines, declares acquiring BrightRoll "will dramatically strengthen Yahoo's video advertising platform, making it the largest in the US."
    • The acquisition price is lower than the ~$700M previously reported by TechCrunch. Yahoo just reaped $6.3B in post-tax Alibaba IPO proceeds; it has promised to return at least half of the sum to shareholders.
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Company Description
Yahoo! Inc is a technology company. It offers search, content and communication on mobile phone, tablet or desktop.