Yahoo’s Back: increasing profits and fighting the big boys
Posted by Admin @ April 28th, 2008 in Marketing Analysis
It seems the tides are turning for Yahoo!. After two years of slumping profits in the face of vigorous competition in the search arena Yahoo! has announced quarterly profits of $542m up from $142.4m for the same period in 2007 (It must be noted though that these profits were helped along by a $401m sale of Yahoo’s stake in Chinese internet company Alibaba.com). This announcement has illustrated the shift of advertising online which was also confirmed by Google’s reporting of a 30% increase in profits.
This news will delight Yahoo!’s investors and shareholders who in the past have been loosing confidence with Yahoo!’s poor performance on the stock market and talks of sales and alliances; Microsoft’s take over Yahoo! in order to gain some sort of competitive chance against Google. Yahoo!’s shifting fortunes have re-instilled belief that fending of this $44.6bn buy out bid was the right decision. The recent jump in profits have given Yahoo! a boost in bargaining power against the computer giant as they have been able to prove their worth and illustrate that they are still competitive and going strong. This said, Microsoft has given Yahoo! an ultimatum; accept bid by 26th of April or face a hostile takeover .
The search landscape is changing somewhat and Yahoo!’s regained self-belief has opened up more opportunities. Jerry Yang, Yahoo!’s CEO and co founder, recently commented ‘Our board and management team continue to be open to any and all alternatives, including a Microsoft deal’ . This is mirrored in the deal Yahoo! has recently struck with Google where Yahoo! will show Google Ads on 3% of its advertising inventory. This has also opened speculation that Yahoo! and Google may enter a deeper alliance through a possible takeover by AOL Warner, of which Google own a 5% stock in AOL. Although I am sure the US antitrust regulators may have something to say about this.
This recent news of Yahoo!’s gains seem to have given them a new lease of life. With talk of Microsoft possibly increasing their bid and Google interested in doing business with them Yahoo! are certainly more in demand then they have been in previous years. Only time will tell whether this is a true shift of fortunes or a blip on the road to a takeover. What ever happens in the future Yahoo!’s revival once again highlights the fact that advertising is very much now an online game.
by Peter Jackson from 77Academy
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Comments
Del Sauzo
April 29th, 2008
Would love to see how this whole ‘Clash of the titans’ manouvers among these big guys will eventually play out.
Nice post
m.barreto
April 29th, 2008
ibid…
silence still invades cyberspace, deadline has passed; I think Steve needs to do some ‘major lobbying’… who knows when all this will eventually untangle..
thanks!