Yahoo! Inc. (NASDAQ:YHOO)‘s annual shareholder meeting had its ups and downs. The company seems to be on the right track, when it comes to managing costs and growing the user experience. There’s no doubt that the company is geared toward the web user, as it has been aggressively improving the quality of its products.
Shareholder meeting highlights
The company reported that it was able to grow Yahoo! Inc. (NASDAQ:YHOO) mail user activity by 10% (no time frame was provided). It also grew homepage interaction (key-word interaction, and no time frame was provided) by 25%. The company’s mobile growth is the most important to the company, and with 300 million mobile users Yahoo! Inc. (NASDAQ:YHOO) seems to be on track.
The company has been really aggressive about turning around Flickr! The website has seen significant improvements. The company is focusing heavily on high resolution, user interface, and larger data storage. Flickr looks like a high- resolution version of Instagram, with a couple of extra features. It allows for up to a terabyte of storage. Yahoo! Inc. (NASDAQ:YHOO) should have just said unlimited, because quite frankly, the infinity symbol makes more sense than a trillion bytes of storage.
Anyhow, that’s just me being nit-picky. Flickr looks much more amazing, and I found a lot of photos that I could relate to using the explore option. The problem is that the website doesn’t quite capture the social essence of an alternative social network. But it does provide a destination for people who want to capture captivating photos and share them.
The company currently has 10% of the global display market. It provided an outlook that basically indicates that the company can double its Non-GAAP operating income from $566 million to $1.1 billion. Yahoo! Inc. (NASDAQ:YHOO) seems well positioned as long as it continues to create compelling products.
One of the interesting things about the meeting
There were three calls related to Wal-Mart Stores, Inc. (NYSE:WMT) during the shareholder meeting. Wal-Mart Stores, Inc. (NYSE:WMT) employees were stating how heavily dissatisfied they were about the current working conditions. This is interesting because Marissa Mayer works on the Wal-Mart Stores, Inc. (NYSE:WMT) board, which is why the disgruntled employees called in the first place. This gets me thinking that Mayer’s cost-cutting strategy over at Yahoo! Inc. (NASDAQ:YHOO) may have involved some unique ideas from all those Wal-Mart Stores, Inc. (NYSE:WMT) board meetings. That being the case, Mayer did handle herself extremely well at the shareholder meeting, and told the callers that it wasn’t the time or place.
Since we’re on the topic of Wal-Mart Stores, Inc. (NYSE:WMT), I believe that the company is a compelling investment opportunity. The stock market volatility has been extremely intense, and it could be a very effective at lowering risk. Bonds are a bad place to be right now, so investors need to consider coupon-like stocks (basically stocks like Wal-Mart).
The company’s every-day-low-pricing strategy has been effective, and it’s probable that the company can better address the customer service complaints by implementing its temporary worker strategy. The company was hit by currency headwinds, which lowered performance in its international division.
But Wal-Mart was at least able to grow comparable-store sales in the domestic Wal-Mart Stores, Inc. (NYSE:WMT) segment by 1.3% in the most recent quarter. Analysts on a consensus basis anticipate Wal-Mart to grow earnings by 10.5%. The growth is paired with a 2.5% dividend yield. The stock trades at a 15 earnings multiple. The multiple is reasonable when considering the consistency in earnings growth the company has exhibited over the years.
Flickr versus Instagram
I believe that Facebook Inc (NASDAQ:FB) could be again some competition in picture sharing. The company is heavily exposed to the potential downside of owning Instagram. Just recently it was able to fend off Twitter’s video-sharing network, Vine. Vine is a social application that allows users to share extremely short clips. Instagram released a similar feature recently. Based on initial statistics, the video- sharing application has had very little penetration, which is a little worrisome for me.
Going forward, Flickr could win the hearts of photo enthusiasts. Not everyone wants to take a picture of their own face, the food they eat, and the car they drive. People want variety, and one photo-sharing service that provides a bit of a professional feel to it is Flickr. This is going to put downward pressure on Instagram as it has lost a bit of photo traffic because of the social pressure it has brought onto its user base by providing a short video-clip feature.
Analysts on a consensus basis remain fairly optimistic of the company’s earnings growth. Of course, this earnings growth isn’t driven by Instagram. Rather it has more to do with rising advertising spending, along with international user growth. The company is projected to grow earnings at a 28.3% rate over the next five years.
Conclusion
Yahoo! Inc. (NASDAQ:YHOO) had a lot of positive things to say at its conference. The company has built stronger products, which has driven the positive audience metrics. It is hoping to grow its earnings significantly over the longer term. Meanwhile, Wal-Mart Stores, Inc. (NYSE:WMT) is a compelling investment opportunity, and knowing that Mayer serves on the board of directors for Wal-Mart should give investors an added level of reassurance. I also believe that Flickr could give Instagram a good run for its money.
The article Yahoo! Shareholder Meeting Raided by Wal-Mart Employees originally appeared on Fool.com and is written by Alexander Cho.
Alexander Cho has no position in any stocks mentioned. The Motley Fool recommends Facebook. The Motley Fool owns shares of Facebook. Alexander is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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