Yahoo! Inc. (YHOO), Youku Tudou Inc (ADR) (YOKU), Sohu.com Inc (SOHU): 3 Internet Companies to Buy in 2013

Page 1 of 2

According to a study by Cisco, global mobile traffic grew by 70% in 2012 year over year. This traffic is expected to increase by 11.2 exabytes per month by 2017. The key factors for this growth will be feature enhancements in mobile devices and growth in the usage of smartphones and tablets. Though mobile devices contributed only around 4% to Internet traffic in 2012, with a constant increase in their usage they are expected to be a key factor for Internet traffic growth in the future.

In this article, I have picked three companies –Yahoo! Inc. (NASDAQ:YHOO), Youku Tudou Inc (ADR) (NYSE:YOKU), and Sohu.com Inc (NASDAQ:SOHU) – that have performed well in the past and expect long-term growth with the increase in mobile Internet usage. Using mobile as a growth platform, these companies are focusing to improve their profitability.

Yahoo! Inc. (NASDAQ:YHOO)

Accelerating mobile platform

Yahoo! Inc. (NASDAQ:YHOO) reported mixed earnings for the first quarter of 2013. Its first-quarter revenue was $1.07 billion, which included a decline in search and display advertisement revenue due to a lower price per advertisement rate. However, Yahoo!’s advertising revenue from mobile platforms improved and reached 300 million unique users this quarter against 167 million in the previous quarter. Mobile is going to be an important driver for the company’s long-term growth as its usage increases. Advertisers usually pay less for mobile display advertisements than other ad types, but Yahoo! reported a 16% increase in “paid clicks” this quarter as compared to the first quarter of 2012 thanks to improved content. By improving the mobile user experience and increasing content delivery, Yahoo! Inc. (NASDAQ:YHOO) has increased its focus on mobile display advertisements. It is estimated that the global mobile advertising market will reach $26.6 billion by 2016, and with accelerating mobile internet trends the company is targeting good advertisement revenue growth.

In the first quarter, Yahoo! Inc. (NASDAQ:YHOO)’s search advertisement revenue declined to $425 million, a loss of 10% year over year. To an extent, this decline in revenue was because of the closure of the company’s South Korean office. The search advertisement segment is one of the largest contributors to the company’s revenue, however, and shares 14% of the company’s total value. In a recent contract with Microsoft’s Bing, Yahoo! Inc. (NASDAQ:YHOO) has lowered its traffic acquisition costs by 3.7% in first-quarter 2013. This helped Yahoo! to report advertisement earnings growth of 6% quarter-over-quarter. It also saw a gain of 16% in paid clicks because of customized content. Providing customized content to its users, the company can further improve its search advertisement earnings.

Mobile - the next growth driver

With increasing demand for online video advertising and overall mobile user growth, Youku Tudou Inc (ADR) (NYSE:YOKU)reported first-quarter 2013 results with net revenue of $83 million, which was an increase of 21% from the first quarter of 2012. It posted net advertising revenue of $69 million, meeting the company’s estimation. The growth was mainly driven by increased use of its advertising services by branded advertising companies, along with improvements in the number of advertisers and increasing average spending per advertiser.

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

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!