A Few Reasons Why Yahoo! Inc. (YHOO) Is Getting Better

Page 1 of 2

In a few days, Marissa Mayer will mark her first anniversary as the president and CEO of Yahoo! Inc. (NASDAQ:YHOO). The former Google Inc (NASDAQ:GOOG) vice president for location and search was appointed CEO of Yahoo! on July 16, 2012, at a time when the company was experiencing some of its toughest times since inception.

Yahoo icon

Just before Mayer’s appointment, Yahoo! Inc. (NASDAQ:YHOO) had hired and fired two CEOs in less than four years, along with other top executives. Since Marissa Mayer’s appointment, Yahoo! is up around 56%, and seems likely to build on that momentum going forward. During her time, the company has acquired 12 companies in a bid to turn things around.

Yahoo! Inc. (NASDAQ:YHOO), which some people thought would follow AOL, Inc. (NYSE:AOL) to the list of struggling internet-based companies, seems set to pull out a surprise turnaround under the new CEO. However, only time will determined how sustainable the company’s current rally is. Media critics, and even some analysts, believe that Yahoo!’s current rally is driven by the anticipated sale of half of its stake in the Chinese e-commerce giant, Alibaba. However, there are tremendous changes to Yahoo!’s platform and associated sites that must not be ignored. These, along with the acquisitions, could determine the success of Yahoo!’s turnaround.

Yahoo!’s platform and associated sites doing well

Mayer stated categorically that building new products remains a priority for the company as the turnaround campaign gears up. This strategy is already beginning to pay-off, based on recent statistics from Yahoo! Inc. (NASDAQ:YHOO)’s home page and associated sites.

For instance, Mayer recently revealed that home page interaction is up 25% since overhaul, while the revamped Flickr reported 400% increase in uploads. The company’s $1.1 billion acquisition of Tumblr is also another major boost to the turnaround plan, and should play a huge part in traffic generation going forward.

Yahoo! Inc. (NASDAQ:YHOO) is looking to boost all its major sites including Yahoo! Mail, by making them more user-friendly to encourage user interaction. It is this interaction that will lead to increased engagement levels, which could result in sustainable revenue growth rates if monetized effectively.

Currently, Yahoo!’s most interactive sites are Yahoo! Sports (mainly due to fantasy football), Yahoo! Weather, and Yahoo! Finance. Its search business continues to trail that of Google Inc (NASDAQ:GOOG) while Microsoft Corporation (NASDAQ:MSFT)’s Bing and Baidu.com, Inc. (ADR) (NASDAQ:BIDU) of China are also making inroads.

The company stresses the need to make people’s daily habits more enjoyable, as a pillar that could help improve email, and weather among other platforms. In general, all this seems to be pointing to one thing, user engagement, which should boost ad revenue.

The re-branding campaign and acquisitions seem to be getting less credit than they deserve with regard to Yahoo!’s rally over the last twelve months. Analysts are pinning the company’s current price to the success of Yahoo! Japan and the prospective sale of half of its stake in Alibaba.com.

A struggle to catch Google

While Yahoo! is plotting a turnaround, Google, the search engine giant is already advancing its plans to maintain the position of being the largest in the world. The company has already integrated its social platform with search in a bid to customize search results depending on a person’s activity on the internet. This is also the strategy used by Facebook Inc (NASDAQ:FB) Ad exchange, which seeks to redefine the search business by tracking user activity on the internet.

On the other hand, AOL, Inc. (NYSE:AOL) search continues to falter against Google, with Facebook Inc (NASDAQ:FB) even becoming a more serious threat to the search engine giant. However, AOL seeks to increase its revenue from Web Video as evidenced in its deal with Taboola.

According to the agreement, publishers will add a box at the bottom of their pages that serves up videos from AOL as well as links to other sites picked by Taboola. This will help AOL push more video to other publisher sites. If readers click on a Taboola-recommneded off-site link, Taboola will share some of the revenue it gets from directing that click with the publisher, too.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

10 Self-Made Billionaires Who Came From Nothing

The 10 Most Expensive Cities to Live in North America

The 13 Most Expensive Headphones in the World to Represent

The Top 20 Wealthiest Soccer Teams in 2014

4 BuzzWorthy Cannabis Stocks And Some Smoking Derivative Plays

The 10 Healthiest Fast Food Chains in America to Dine At

The 5 Most Expensive Cat Food Brands You Can Spoil Your Kitty With

The 6 Best eCommerce Platforms for Small Businesses

The 10 Worst Mistakes an Entrepreneur Can Make

The 5 Most OP Characters in League of Legends to Carry Games and Crush Foes With

The 5 Best Foods to Eat Before Running that Will Help You Pound the Pavement

10 Glaring Plot Holes in The Walking Dead that a Zombie-Filled Bus Could Drive Through

The 5 Biggest Celebrity Stoners Who Love Their Reefer

The 10 Most Overrated Movies Of All Time by Out-of-Touch Critics

Top 6 Least Expensive Cruise Destinations For 2015 that Will Take You to Paradise

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

How to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

5 Most Valuable Brands in China

The 10 States with Highest Substance Abuse Rates Crippling Their Populace

The Top 10 Things to Do Before You Die That Will Echo for Eternity

The 10 Best Selling Items on Etsy

Top 10 Things to Do in Tokyo, the Greatest City in the World

10 Mistakes on Social Media that Can Harm You and Will Probably Get You Canned

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!