Tag Archives: yahoo

Yahoo Expansion Without Gwyneth Paltrow

Yahoo has been looking at ways to get back on track as the former internet giant has experienced continuous decline in advertising revenue. Yahoo has acquired about 40 companies since Marissa Mayer became CEO a bit over two years ago but these have not been able to ad anything significant to the button line.

Most recently Yahoo has been working on hiring celebrities as guests writers to attract visitors and Since Gwyneth Paltrow is running the successful lifestyle blog Goop, she came up as the ideal candidate to write for Yahoo Food. That however did not happen according to The Hollywood Reporter as Marissa Mayer  “disapproved of the fact that Paltrow did not graduate college.”

We are pretty sure that wouldn’t have mattered to readers and followers of Gwyneth Paltrow.

Firefox Coming For iPhone And iPad

Firefox is one of the most popular browsers but it isn’t available for iOS. The reason is because Apple doesn’t allow Firefox to its own web engine, so the company has always said it would not release a Firefox version for iOS which would force them to run Apple’s engine instead.

Firefox manager Lukas Blakk wrote on Twitter “”we need to be where our users are so we’re going to get Firefox on iOS”.

Chris Beard, the new CEO of Firefox, seems to be making a number of strategic changes, just last month it was announced that Yahoo will be the default search engine, replacing Google.

Yahoo Now The Default Firefox Search Engine

Starting in December, Yahoo will replace Google as the default search engine for Firefox.

Yahoo and Mozilla signed a five year agreement which so far is only valid for the U.S. but could expand internationally as well.

Yahoo currently has about 10% share in the search market. Bing comes in at 20% while Google still dominates the space with 67% according to comScore.

Firefox itself also has about 10% of the browser market and Yahoo is looking to at incremental users through the new agreement.

No financial details were disclosed.

Yahoo Acquires BrightRoll, The Largest Video Advertising Platform

Yahoo has been struggling with declining advertising sales and relevance compared to the likes of Google and Facebook.

Now the company has announced yet another acquisition in order to stop this trend. Yahoo is buying BrightRoll which is the largest video advertising platform in the US.

Yahoo is paying $640 million for BrightRoll which generates about $100 million in revenue.

Here is the statement from both companies:

“Video, along with mobile, social, and native, is driving a surge in digital advertising. Here at Yahoo, video is one of the largest growth opportunities, and BrightRoll is a terrific, strategic and financially compelling fit for our video advertising business,” said Marissa Mayer, Yahoo CEO. “As with every acquisition, we have been extremely thoughtful about our approach to the video advertising space. This acquisition will accelerate the growth of both companies – we can help BrightRoll scale to even more advertisers globally and they can bring their tremendous platform offering to Yahoo’s advertisers. The combination builds positive momentum for Yahoo’s broader display advertising business in 2015.”

“We believe the next step for programmatic video advertising as an industry is to extend and standardize globally, make cross-device buying simple and measurable, and complement and integrate with TV,” said Tod Sacerdoti, BrightRoll CEO and Founder. “We are excited to join Yahoo to materially advance efforts in each of these areas. We’re still in the early innings as an industry, and together, BrightRoll and Yahoo are committed to the vision of helping grow the entire video advertising ecosystem.”

Yahoo and Google tell the government there will be no spying on users anymore!

Both Yahoo and Google have come out and said they are working on more secure email systems that will not allow government agencies or hackers to get access to users emails.

Since the NSA scandal exposed by Edward Snowden a lot of people have had growing concerns about the security and privacy of their online communication.

There is no such thing as impossible these days. The companies can come up with encryptions all day long, in the end hackers and the government will find a way to access the data they consider necessary.

Yahoo Financials – Advertising declines, new deal with Alibaba

A few days ago we posed the question “What is next for Yahoo?“.

After analyzing the two years under Marissa Mayer, how the share price has developed, acquisitions and other factors we concluded with a number of main aspects to focus on:

  • Short-term Yahoo is going to rely on the growth and IPO success of Alibaba.
  • Long-term they have to grown their user base, especially in the mobile segment and turn that into advertising revenue.
  • Acquisition spree needs to slow down (Yahoo has bought 39 companies under Marissa Mayer). The focus needs to be on integrating these and deliver contributions to the bottom line

We were looking for the July 15th earnings of the company to give us some insight where the company is heading. The company announced a number of things directly related to what we focused on in our original article:

Yahoo owns 24% of Alibaba which is expected to have the largest technology IPO in history, with analysts valuing the company in the region of $200 billion. There was an agreement in place which forced Yahoo to sell 208 million shares but the company announced on Tuesday that the number of shares being sold in the IPO has decreased to 140 million.
What does this mean for Yahoo? They still generate a substantial amount of cash when Alibaba goes public, at the same time they will hold a larger percentage of the company than originally agreed which means investors and analysts will calculate a lot of the Alibaba success into the Yahoo share price and Mayer gets more time to continue her quest of turning the company around.

And looking at the recent quarter that is definitely something she needs:

The number of mobile users has grown under the new CEO but the company continues to struggle when it comes to generating advertising revenue.

Here are the financial highlights of the most recent quarter:

 

  • Revenue: $1.08 billion (down from $1.14 billion during the same period last year)
  • Profit: $270 million (down from $331 million last year)
  • Display ad revenue decreased by 8%
  • YOY advertising sales increased by 24% but the price per ad decreased by the same percentage
  • Mobile, social and video ads have grown over 90% in a year but only make up a fraction of the overall revenue generated

Yahoo also decreased their forecast for the third quarter giving a range of $1.06 – 1.1 billion.

In our original article on the future of Yahoo we noted that the acquisitions have to start paying off and contribute to revenue and profits. The company has had several quarters to integrate their biggest acquisition Tumblr but so far the largest blogging network in the world has only given Yahoo more visitors but no visible revenue.

Marissa Mayer mentioned during the call that the transformation of the company will take several years. Holding a larger stake in Alibaba could buy her some time if the Chinese company performs strong after the IPO but regardless of that investors are going to focus more on more on the other aspects of the Yahoo business if the trend continues as it has.

What is next for Yahoo? – Acquisition spree continues

Marissa Mayer took charge of Yahoo in July 2012. She has tried to radically change the company culture, while often controversial, Yahoo is certainly not seen as the former giant, that is now old-school and just not worth looking at for the rising talents within the tech industry.

When Mayer took charge of Yahoo, the closing price on NASDAQ was $15.65, within a year the share price nearly doubled to $29 and a year later now is trading at around $35.

With the appointment of Mayer, the Yahoo board was on a mission to breathe new life into the company and also shutting down critics who went up against them when they turned down the $33 per share offer from Microsoft to acquire the company in 2008.

While the share price has had a run under the new CEO, the road ahead will be challenging.

A majority of the growth within the Yahoo Group has come from Alibaba which Yahoo owns 24% of. The company reported $3.06 billion in revenue in the first quarter, that is an astonishing increase of 66% year over year. That growth has helped Yahoo when it comes to their own struggles of growing revenue and profit. But it remains to be seen, what impact it will have when Alibaba goes public and Yahoo has to sell about 10% of their shares in the company.

One thing it will do for sure is give Mayer additional cash to continue her acquisition spree in order to transform the company, grow the user base and ultimately revenue and profits.

The company just announced that it has acquired the online video platform RavY.

Here is what the Israel-based company had to say:

“Our RayV adventure now comes to a pivot, and we couldn’t be more excited. We believe Yahoo will be a perfect fit for our people and capabilities, as Video and Mobile offerings are a central part of Yahoo’s vision. Yahoo’s global scale and broad content base, combined with its amazing leadership and appetite for success, creates an ideal environment for our team to thrive and be pushed to the next level.”

RavY has been around for 8 years and has 11 employees. While we are not familiar with the IP that made them interesting for Yahoo, it certainly isn’t the high profile acquisition Mayer was hoping for as she previously has failed to come to an agreement with Hulu for example.
So Google doesn’t have to be concerned about serious competition for YouTube just yet.

The RavY acquisition is just one name in a long list of acquisitions since Mayer took over as the new CEO. Two years and 39 acquisitions!

Tumblr ($1.1 billion), Summly ($50 million), Qwiki ($50 million), Xobni ($40 million), Lexity ($35 million), Snip ($10 million), Ptch ($6.5 million) have been the biggest acquisitions. The price for RavY has not been made public.

So what is next for Yahoo?

Integrating 39 companies within a two year timeframe isn’t an easy task and while the company saw some growth during the past quarter you have to wonder when these acquisitions are actually going to pay off.

Short-term Yahoo is going to rely on the growth and IPO success of Alibaba.

Long-term they have to grown their user base, especially in the mobile segment and turn that into advertising revenue. In addition to that the acquisition spree has to slow down at some point and the focus needs to be on integrating these companies and the technology to ultimately impact revenue and profit.

We will get a small insight to recent and future developments when Yahoo earnings are announced on Tuesday the 15th of July (Google earnings to follow on Thursday the same week).