Yahoo Enters Local Marketing Competition With AOL, Google and Facebook

Includes: AOL, GOOG, YHOO
by: Trefis

Yahoo (NASDAQ:YHOO) recently announced the launch of Local Offers, a program for users looking for the best local deals, news and events in their area. [1] Yahoo is partnering with websites like Groupon, LivingSocial, Gilt City, and others to provide a wide selection of local deals, coupons, and more from nearby restaurants and other local retailers. The move will allow Yahoo to compete with Google (NASDAQ:GOOG), AOL (NYSE:AOL) and Facebook, which already have a headstart in the market.

Yahoo Enters the Local Arena Amid Stiff Competition

Google and Facebook have already started to provide local offers to users. For example, Google has partnered with businesses that advertise special deals to users of Google’s search engine. Similarly, Facebook recently announced an initiative called “Deals” that allows merchants to make offerings through mobile devices to Facebook users who are near the merchant’s location. AOL Patch is a similar service, and is already present in more than 300 cities across the U.S.

If Yahoo can provide a differentiated product, it could attract more users to the site. The product could also boost user engagement and ultimately increase page views per visitor.

Yahoo had about 600 million unique visitors in 2009, and we believe this number will continue to increase to around 800 million by the end of the Trefis forecast period.

Drag the trend-line in the chart below to assess the impact of changes in internet visitor totals on Yahoo’s stock value.

We forecast that Yahoo’s page views per user will grow from around 250 per month in 2010 to around 265 by 2013.

There could be an upside of 10% to the $18.53 Trefis price estimate for Yahoo stock if the company’s unique visitor total increases to almost 850 million by 2013, and page views per user increases to around 285 per month by 2013 (assuming the upward trend continues through the Trefis forecast period).

Drag the trend-line in the chart below to assess the impact of changes in page views per user on Yahoo’s stock value.


  1. Yahoo Press Release: Yahoo! Launches Comprehensive Local Offers Program

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