Yandex NV (YNDX) Points to Central Asian Internet Growth

On the other hand, Microsoft has also reported its Q2-2013 results recently, in which it earned an EPS of $0.76 per share, 1 cent more than analysts’ estimates, coming from revenues of $21.46 billion and a net income of $6.38 billion. Microsoft’s online services division, which, according to Microsoft, gets “nearly all” of its revenues from Bing and MSN, has earned revenues of $869 million, an increase of $85 million from the same quarter last year while it narrowed its losses by 38% to $283 million. The relatively better performance was due to a 15% increase in online advertising revenues and a reduction in costs and marketing expenses. Bing is still far from being profitable, and comScore’s data has shown that its growth remained static in the final two months of 2012. Bing is moving slowly towards a breakeven, and analysts estimate that it will likely take more than two years. Nonetheless, Microsoft is committed to Bing and likes what is finally beginning to happen on the revenue front.

With the release of Windows 8, the rapidly increasing installed base of Windows Phone — if not in market share then in raw numbers — and the improvements in Internet Explorer to make it a more enticing product and stave off rising competition from Firefox, Safari and Chrome are driving the incremental gains in Bing’s advertising rates.  Yandex is benefiting nicely from the installation onto Windows Phones sold in Russia, which could be the main driver for the very steep rise (313% over 2011 to a 5% market share) in WP8 handsets in Russia.

I like Yandex’s prospects as a gaggle of entry-level Windows Phones will hit Russia over the rest of Q1 and Q2.  Phones from Nokia Corporation (ADR) (NYSE:NOK), Huawei, and HTC will all be released well under the $300 price point without a contract. I also like its moves into emerging markets like Turkey and into social media integration.

Yandex Microsoft
Stock 6M 20.90% -8.42%
P/E 33.69 15.31
EPS 0.74 1.82
Yield N/A 3.30%
ROA 15.60% 13.41%
ROE 25.10% 22.62%

The article Yandex Points to Central Asian Internet Growth originally appeared on Fool.com and is written by Peter Pham.

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