Sunday 22 April 2018

Mayer inbox full as she aims to turn around Yahoo fortunes

Marissa Mayer, vice president, search products and user experience for Google Inc, unveils
Marissa Mayer, vice president, search products and user experience for Google Inc, unveils "Google Instant" during a news conference in San Francisco, California. Photo: Reuters

Aditi Sharma

WALL Street analysts chose to ignore Yahoo's lacklustre quarterly results but will be scrutinising Marissa Mayer's every move as she takes the helm at the company.

In a note titled 'It Really Wasn't About The Quarter', RBC Capital Markets analysts said they expected investors to focus on the new CEO's strategy, which would likely be communicated over the next few months.

"A slight miss on display, a modest beat on search, but other factors remain more relevant for the stock," RBC analyst Andre Sequin said.

Ms Mayer, Yahoo's third chief in the past 12 months, has the huge task of turning the company around, and investors are counting on her strong background in products and technology and her deep understanding of the internet to get the job done.

Poached

Yahoo stunned analysts, investors and industry watchers on Monday when it poached Ms Mayer from Google to fill the top job. Many had assumed that Ross Levinsohn would be named to the position after his stellar run as interim-CEO.

Citi Investment Research analysts, who maintained Yahoo's rating and price target, said Ms Mayer has a long "to-do list" for bringing the once-iconic company back on track.

Yahoo's chief financial officer Tim Morse said the company wanted to give Ms Mayer time to get acclimatised with the company before providing guidance for the rest of the year.

Some observers have speculated that her surprise appointment signals Yahoo's intention to renew its focus on web technology and products rather than beefing up online content.

"We still need to see a more coherent strategy around the core business and signs of operational improvement to get more constructive on the shares," JPMorgan Securities said.

Barclays said the 1pc growth in display revenue was disappointing, but not unexpected given the across-the-board slowdown in online ad prices.

Yahoo's third-quarter results should benefit from the Olympics and the US elections and a slight sequential revenue growth from its recently acquired online advertising company Interclick, it added.

JPMorgan raised its price target on Yahoo shares to $18 from $17, while Barclays cut its price target to $18 from $20. Yahoo shares were flat at $15.60 yesterday on the Nasdaq.

(Reuters)

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