Tag Archives: yhoo

Yahoo Digital Ad Dollars To Drop In 2016, As Facebook, Google Grow

Yahoo ( YHOO ) will see a major drop in its digital ad revenue this year, even as rivals Facebook ( FB ) and Alphabet ( GOOGL ) unit Google watch their share grow, according to eMarketer’s latest ad spending forecast, released Wednesday. Yahoo’s worldwide net digital ad revenues will fall nearly 14% to $2.83 billion this year. That will cut Yahoo’s share of the overall digital ad market to 1.5% from 2.1% last year, eMarketer said. Both search and display ad revenue for Yahoo will drop by double-digit percentages in 2016, says the forecast. The Web portal’s display business will shrink to $1.41 billion, down 15.1% year over year, while its search business will decline 12.7% to $1.41 billion. Google, which dominates the global digital ad market, will see its net ad revenue rise 9% this year, while Facebook’s net ad revenue will jump 31%, says the report. “As Yahoo trims down its legacy business to focus on its so-called ‘Mavens’ (mobile, video, native ads and social businesses), we expect the company to shrink in size relative to its competitors,” said eMarketer analyst Martin Utreras. “A leaner Yahoo, more focused on its core growing segments, will still face stiff competition in an ever more crowded and sophisticated market.” The one area of growth for Yahoo is mobile, said eMarketer. Worldwide, Yahoo’s mobile ad business will grow 24.5% this year to $1.31 billion. Yet with rivals Google and Facebook poised to grow by even larger percentages, Yahoo’s share of the mobile market will shrink to 1.3% from 1.5%. Besides Facebook and Alphabet, Sunnyvale, Calif.-based Yahoo faced ad competition from companies such as  Netflix ( NFLX ), Snapchat and Pinterest. Yahoo CEO Marissa Mayer is under fire from investors who are inpatient for profits and want to oust her from her job. The company has hired three investment banking firms to evaluate potential bids for the sale of its core Internet operations. The company has said it is looking at its strategic options and has been cutting costs, including laying off 15% of its staff and closing several offices overseas. Mayer’s turnaround plan for the company includes continued investment in “Mavens.” Rosenblatt Securities said on Monday that Yahoo could be facing a “take-under” — a buyout price lower than market value — from any of a number of private equity firms that might then dismantle the company. Much of Yahoo’s value comes from its holdings in China e-commerce giant Alibaba Group ( BABA ). Yahoo stock has fallen nearly 25% over the past year amid concerns about the company’s poor financial showing and its future prospects for growth. Yahoo stock, which touched a three-month high above 36 on Tuesday, was down 1.5% in midday trading in the stock market today , below 35.

Microsoft, Inphi Plan To Leave Amazon, Apple In Digital Drone Dust

Tech giant Microsoft ( MSFT ) and chipmaker Inphi ( IPHI ) plan to leave Apple ( AAPL ), Amazon.com ( AMZN ) and Alphabet ( GOOGL ) in their drone dust come Q3 … digitally speaking. Early Tuesday, the companies introduced a 100-gigabit platform capable of digitally tying multiple data centers within 80 kilometers (about 50 miles). Previously, that breakneck 100G speed was possible only in cross-country networks. Linking data centers to amass cloud size — and speed — will become more necessary as cloud users like  Facebook ( FB ), Alibaba ( BABA ), Yahoo ( YHOO ) and others expand their online footprint, says Jeff Cox, Microsoft senior director of network architecture. Microsoft realized as much in 2012, but the industry’s “long-haul solution” for cross-country information transit was too hefty for use in metropolitan areas, Cox says. It would be the travel equivalent of launching a Boeing 777 to go from John Wayne Airport near Anaheim, Calif., to Los Angeles International Airport 20 miles away. “You’d take a cab, not a 777,” he told IBD. “For those distances across town, we want these large quantities, but that’s the wrong approach.” Trains, Planes, Trucks … And Drones In 2013, Microsoft and Inphi teamed up to solve the problem. Inphi moves data in the same way FedEx ( FDX ) transports packages — by trains, planes and trucks, Inphi CEO Ford Tamer told IBD. The Microsoft-Inphi solution is a 100G “drone.” Inphi also has a 100G long-haul solution under its Coherent platform. But the Coherent platform is more power-consumptive, expensive and requires space to allow excess heat to dissipate, Cox says. He estimates the Coherent platform uses 20 times more power than the new Inphi-Microsoft platform. “Using the Coherent technology would blow your entire power budget,” he said. “It’s fairly impractical at this scale.” Enter Colorz. Microsoft and Inphi’s partnership will be borne out in the Colorz platform — faster than the industry’s current 10G drones and less costly than 100G long-hauls, Tamer says. The 100G drones are capable of moving the digital equivalent of the Library of Congress multiple times in one second. “We do not believe there is any other solution that can achieve what we’ve done in the power and cost envelope,” Tamer said. “For that type of power and that type of performance and that distance, we do believe it’s an industry first.” Who Needs 640KB RAM? Three years ago, Microsoft met brick walls as it sought to reach 100G inside city limits, Cox said. He referenced tech lore when, in 1981, company co-founder Bill Gates asked who would need more than 640 kilobytes, in defense of IBM ‘s ( IBM ) newest PC, based on an Intel ( INTC ) processor. “Almost kind of like 10 years ago, when people asked, ‘Who needs more than 640KB of RAM (computer memory, where 4GB is now standard)?’ ” Cox said. “Then it was, ‘Who needs more than 100G in a metro?’ I think it was hard for people to wrap their heads around it.” Since then, he says, bandwidth needs have multiplied. Cloud providers are leasing or buying data center spaces across the world as their needs outgrow those of traditional consumers like IT and Internet providers. Data center is the industry’s new buzzword, and chipmakers especially are making a hard run for a piece of this market. Over the past year, Intel, Qualcomm ( QCOM ), Broadcom ( AVGO ), Nvidia ( NVDA ) and Integrated Device Technology ( IDTI ) have redoubled their data center efforts in a bid to gain share. “I think now when we talk about Microsoft, Google, Amazon and Facebook, everyone is building these infrastructures,” Cox said. “And the scale of these infrastructures is surprising everyone in the industry.” He added: “There isn’t so much disbelief any longer. I think we’ve proven we weren’t kidding. In fact, I think we underestimated a little.”

Yahoo Facing A ‘Take Under’ As Facebook Deal Rumored, Products Cut

Yahoo ( YHOO ) could be facing a “take-under” — a buyout price lower than market value — from any of a number of private equity firms that might then dismantle the troubled Web company, an analyst said Monday. Private equity groups including Silver Lake, TPG and Blackstone might be interested in Yahoo, Rosenblatt Securities said in a research note. Yahoo has been looking at potential buyers while it pares costs, as the company has struggled to re-spark growth. “Yahoo did not get any seasonal uplift from 4Q digital media advertising demand, relative to its much larger peers like Facebook ( FB ) and Alphabet ( GOOGL ), which we think underscores the ongoing competitive challenges for audience and engagement growth across digital media platforms and properties,” wrote Rosenblatt analyst Martin Pyykkonen. “We would expect large private equity investors to seek a deep discount, perhaps even a take-under relative to Yahoo’s implied market value, with an intent to split the core business apart to try to generate value from the sum of the parts vs. the current whole value of the core business,” Pyykkonen said. Rosenblatt maintains a sell rating and price target of 30 on Yahoo stock. Yahoo stock rose 0.7% to 35.40 in afternoon trading in the stock market today ,  earlier touching a three-month high of 36.10. Excluding its 15% stake in China e-commerce giant Alibaba Group ( BABA ), Pyykkonen said, “Yahoo’s current market cap implies $3.3 billion valuation for the core business and the Yahoo Japan stake. We think the fundamental outlook for Yahoo as a ‘growth’ stock is continuing to erode, especially in light of strong secular trends which are benefiting the likes of Facebook and Google owner Alphabet, both of which have more revenue concentration from mobile advertising,” he said. Yahoo’s overall market value currently is near $33.5 billion. Is Yahoo The Next DoubleClick? “Financial engineering” alone won’t fix Yahoo’s growth ills, Pyykkonen said. He pointed to the once-public DoubleClick as an example of what might happen with Yahoo. “In 2005, DoubleClick was acquired by private equity firms Hellman, Friedman and JMI Equity for $1.1B and then sold to Alphabet (Google) just two years later, in 2007, for $3.1 billion. The nearly 3x private equity return was due to DoubleClick being a broken company and stock with poor management execution, but also having core technology and a revenue growth outlook,” said Pyykkonen. In a recent securities filing , Yahoo said it has written down the value of its Tumblr operation by 20% as the microblog’s revenue did not meet Yahoo’s internal projection for 2015, he said. A report in The Information said that Yahoo is considering a deal with Facebook to allow the giant social network to sell ads inside Tumblr’s mobile app, with Yahoo and Facebook splitting the revenue. Tumblr is among the few assets within Yahoo whose audience is growing, The Information said. Yahoo CEO Marissa Mayer is under intensified pressure from major investor Starboard Value, which has urged the exit of Mayer and some directors, as well as the spinoff of Yahoo’s core search business. Yahoo directors are close to offering at least two board seats to the activist hedge fund in order to avert a proxy fight, according to a recent New York Post report. Board member nominations are due by March 26, said Pyykkonen. Dozens of groups are expressing interest in buying the struggling Yahoo, say analysts, with Verizon ( VZ ) among those said to be the most likely acquirer. Facebook and Alphabet carry the highest-possible IBD Composite Rating of 99, while Alibaba has a CR of 82 and Yahoo’s CR is just 40.