Yahoo Highs Could Signal a Return to Glory
Judging by the enthusiasm of Yahoo (NASDAQ:YHOO) investors, it would be easy to think the company is heading back to it glory days in style. In fact, trading on December 5 brought Yahoo to heights not seen since January 2006, when the stock broke the $40 mark. As the company veers toward eight-year highs, it’s valid to expect a return to glory following the aggressive acquisitions and hiring that have boosted company image and morale.
Investors have been encountering “deja vu all over again” in recent Yahoo shopping sprees. Any tech company with the goods to boost Yahoo’s profile in video content, live streaming services, fantasy football, or old-fashioned news should be ready to receive a call from the hungry corporation. Chief executive Marissa Mayer hasn’t been shy about snatching up any company that could expand the Yahoo web.
Chief among the acquisitions was the Tumblr deal. While the price for the social media site was steep, the positioning for the future (young audiences) while keeping the investor-centric present (ad revenues) in mind means Tumblr couldn’t help but boost Yahoo. Other acquisitions are rounding out the fold.
In the week ending December 8, Yahoo announced it had purchased: the Ptch app from DreamWorks Animation (NASDAQ:DWA); SkyPhrase, a company that facilitates language processing using artificial intelligence; and Evntlive, a company specializing in streaming live concerts with an interactive format.
There seems to be no end in sight for the Yahoo acquisitions, which are varied overall but represent a commitment to video content in general. Buys like Tumblr make it easy for investors to stay calm in the short term. Taken as a whole, the buying project generates positive energy for a company that has shown it’s all about the image of late. The star power now at Yahoo won’t hurt, either.
In recent months, Yahoo has gone to great lengths (and expense) to attract media names of the highest order. Adding Katie Couric as the Yahoo home page’s “global anchor” showed there is no limit to the company’s ambition. If the Tumblr deal catered to younger generations, Couric plays to old-school news consumers that appeal to advertisers.
A report on the Couric deal in Advertising Age suggested the impact on advertising rates would be immediate for Yahoo. Ad buyers told the publication anywhere from $3.6 million to $6.6 million in incremental revenue could be added to Yahoo’s coffers with the addition of Couric. Other hirings suggest the Yahoo News team will shoot for journalism of the highest order.
Yahoo’s announcement that it had brought David Pogue of The New York Times on board sent shockwaves throughout the media community. Pogue, the legendary tech columnist at the Times, adds another level of savvy and credibility to the brand.
Every acquisition costs money, as do high-profile figures from the media world. However, Marissa Mayer is steering the ship exactly where it needs to go. The stock price has doubled in the 12 months since December 2012, which brings Yahoo close to the heights of the past 13 years. There is plenty of evidence to suggest Yahoo is poised to go even higher.
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