What Yahoo! Inc. (YHOO) Needs To Do After a Weak 2Q

On CNBC, experts on Squawk on the Street put Yahoo! Inc. (NASDAQ:YHOO)’s weak second quarter into perspective and offered free advice on what the company’s management needs to do now that performance figures are not improving as fast as expected.

Yahoo! Inc. (NASDAQ:YHOO)

Believe it or not, Jim Cramer and the other experts on Squawk on the Street believe that Yahoo still needs to make more acquisitions in spite of the fact the company has already made a string of acquisitions since hiring Marissa Mayer as its chief executive officer about two years ago.

Yahoo! Inc. (NASDAQ:YHOO) reported earnings per share of 37 cents on revenue of $1.04 billion. The experts said the earnings missed Wall Street expectation by a penny. Although Yahoo delivered 2Q performance that didn’t even satisfy the management itself, Mayer said the company can and will be able to do better in the future.

Quoted on Squawk on the Street, from a convergence call with investors and analysts after the 2Q release, Mayer remarked:

“In the case of Yahoo! I stated in the past we believe a transformation of this size and scale takes multiple years, and we continue to believe that’s the case today. Even so, given our long term sustainable growth, we are not satisfied with the results this past quarter.”

With the 2Q results being unsatisfying, Mr. Cramer offered an advice: “Going premium content, expensive to produce, and they are not able to monetize it. This is not a growth company. They need to take the Alibaba money and do a terrific acquisition.”

Yahoo! Inc. (NASDAQ:YHOO) has already made numerous acquisitions to the point that it recently launched new products and even announced retirement of aging ones.

As for Alibaba, a Chinese online retailer, Yahoo! owns about 24 percent stake in the company and it is expected to sell nearly 12 percent of its stake in the upcoming Alibaba IPO. Mr. Cramer’s observation that Yahoo! Inc. (NASDAQ:YHOO) should use the IPO funds to make more acquisitions resonates well with the view in Wall Street where several analysts have recommended the same, especially acquisitions that would help the company increase user-engagement and monetization.


Disclosure: none

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

The 10 Countries with the Highest Suicide Rates

The 10 Most Technologically Advanced Countries in the World

The 10 Safest Countries in the World to Live in Peace

The 10 Top Selling Smartphones in the World 2014

The 12 Biggest Shopping Centers in the World

The 10 Friendliest Countries in the World

Qihoo 360 Technology Co Ltd (QIHU), Actavis plc (ACT), Yahoo! Inc. (YHOO) Among 20 Long Ideas from Sohn Canada

The 10 Laziest Countries in the World

The 10 Most Polluted Countries in the World

The 10 Most Dangerous Cities in America 2014

The Top 10 Gold Producing Countries in the World

The 10 Tallest Buildings in the World

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

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!