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

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

6 Ways 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

The 10 Best Cities to Find Jobs in 2014

The 10 Most Controversial Songs Of All Time to Hit (and get Banned from) the Airwaves

The 20 Biggest IPOs in US History

The 10 Best Places to Visit in Mexico that Are Beautiful and Safe

7 Bad Habits that Age You Beyond Your Years

The 40 Best Fortune Cookie Sayings That Will Leave You Bemused, Befuddled, or Beguiled

10 Foods to Eat Before a Workout to Make Every Drop of Sweat Count

The 5 Best Documentaries On Netflix You Must See

The Most Heartwarming and Inspirational Story Of This Halloween Season, It Will Make You Cry and Jump For Joy

10 Best Party Songs of All Time to Bring the House Down With

5 New World Order Conspiracy Theories that Will Strangle the World

The 10 Highest Rated Movies of 2014

The 10 Largest Container Shipping Companies in the World

The 10 Largest Armies in the World: Who Should We Be Afraid Of?

Best Warren Buffett Quotes on Money You Need to Hear

The 10 Highest Suicide Rates by Profession

The 20 Most Underrated Movies of All Time

The 10 Fastest Growing Companies in America

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!