Yahoo! Inc. (YHOO) Message Board

So what’s changed in the last 3 weeks to Goldman’s sum-of-the-parts analysis? Yahoo! “core” is still worth the mid-point of $12.14 billion that Goldman said it was worth before. Yahoo!’s investment in Yahoo Japan has actually increased in the last 3 weeks thanks to its appreciation on the Tokyo Stock Exchange. Today, Yahoo!’s stake in YJ is worth $6.16 billion (net of taxes and fees) instead of $5.64 billion. But the biggest change is Alibaba Group. With an assumption of the group being worth $62.5 billion instead of $35 billion, Yahoo!’s share is worth $8.91 billion (net of taxes and fees) instead of $5.03 billion. Yahoo!’s pref shares in Alibaba that will be repaid are worth another $0.84 billion. And there is still $5.72 billion in cash on Yahoo!’s balance sheet.

Add it all up and Yahoo!’s midpoint sum-of-the-parts valuation – per Goldman – is $33.8 billion (or $35.5 billion at the upper end). Yahoo! has 1.1 billion shares outstanding at the moment. This means Goldman’s current price target for Yahoo! needs to be increased from $27/share to $30.44/share (midpoint) or $32.01 (high point).

Tigress expects the Yahoo's revenue growth to pick up in the second half of 2013, as product improvements and initiatives drive search and ad revenue. Tigress also said it sees Yahoo as a potential strategic acquisition for Facebook, as Yahoo could give Facebook an opportunity to expand both its search and ad platforms, as well as mail and instant-messaging services.

Shares of Yahoo (YHOO) are trending higher in afternoon trading after being started with a Buy rating and called a possible strategic acquisition for Facebook (FB) by Tigress Financial. WHAT'S NEW: In a note to investors earlier today, Tigress Financial initiated research coverage on Yahoo with a Buy rating, saying it expects the company's revenue growth to pick up in the second half of 2013, as product improvements and initiatives drive search and ad revenue. Tigress also said it sees Yahoo as a potential strategic acquisition for Facebook, as Yahoo could give Facebook an opportunity to expand both its search and ad platforms, as well as mail and instant-messaging services.

Alibaba's new $586 million, 18% stake in Sina's "Twitter of China" Weibo unit has investors searching for ways to play Alibaba as rumors swirl about an IPO.

The value of an Alibaba IPO has been estimated to be worth as much as $100 billion, soaring from $45 billion. Analysts widely predict that the IPO will take place as soon as year-end as the company enters the final stages of preparing for a debut.

Yahoo!, which owns a 24% stake in Alibaba, will benefit from the Weibo deal. Through Alibaba, Yahoo! will own an indirect 4.3% stake in Sina. This could actually strengthen Yahoo’s foothold in China, where other western companies such as Google and Microsoft have clumsily fumbled.

Last quarter, Yahoo!’s profit from its two major Asian investments, Alibaba and Yahoo! Japan, came in at $217.5 million - topping the company’s core business profit of $186 million.

Comscore says Google's (GOOG) ranked as number 1 web property in March with 192 million visitors

Says:
- Yahoo sites had 191 million visitors in March & Microsoft had 166 million.

After redesigning its advertising strategy, Yahoo! has launched its Yahoo! app for Android phones.

Yahoo! touts four main features of the Android app:

Summaries. Users can read story summaries to decide if they'd like to read the whole article.
Personalization. Just as on desktop, users can decide to see more or less of a topic.
Upgraded Web, image, and video search.
A "social" button to let them automatically share Yahoo! content via Mail, Facebook, Twitter, and other popular apps.

Under CEO Marissa Mayer's leadership, Yahoo! continues to focus on delivering better content experiences. Already this year, the company has launched a Yahoo! Mail app for tablet users. Additionally, the company acquired Summly for a reported $30 million to boost its summation technology. Now, the company wants to deliver on a seamless, across-platform experiences with the Yahoo! app for Android.

The Yahoo!-ABC News Network, the #1 source of news and information online, is excited to announce the next phase of their partnership, which first launched in October 2011. Three of ABC News’ top franchises - Nightline, World News With Diane Sawyer, and Good Morning America - are coming to Yahoo! as unique, daily, digital-native extensions.

That’s the date that new CEO, Jonathan Lu, and new CFO, Maggie Lu, formally get promoted at Alibaba.

They are going to be taking over for Jack Ma and Joe Tsai respectively — the architects of Alibaba’s enormous growth over the past 14 years.

Both Jonathan Lu and Maggie Lu start on May 10th.

Many Yahoo! investors, including me, believe that we might actually hear news of a possible Alibaba IPO shortly after that date.

Alibaba also need to get about $830 million ready to buy out Yahoo’s preferred shares in Alibaba. Otherwise, Alibaba has to continue paying Yahoo 10% interest on these shares.

And recall that Alibaba is also making annual TIPLA payments (for Technology and Intellectual Property Licensing Agreement) to the tune of about $50 million a year until they IPO.

The bottom line is that Alibaba has ever incentive to file for an IPO on May 10th or soon thereafter. The sooner they IPO, the more economical it will be for them and a better deal they will get from Yahoo for their 12% of shares.

If they file in May, expect an Alibaba IPO in September — with a whole lot of hoopla to go with it.

Eric Jackson-

Alibaba Group, the Chinese e-commerce giant that is 23% owned by Yahoo, has purchased an 18% stake in Sina Corp.’s Weibo microblogging service for $586 million, Sina said in an announcement today.

The deal is in one of the largest transactions between China’s own Internet giants and will likely have a big impact on its huge Internet industry.

Alibaba was also granted options to buy up to 30% of Weibo in the future.

China’s government blocks Twitter, giving Weibo a big advantage in the marketplace.

Alibaba has yet to reveal detailed finances, but if it can time stock market, technology and China cycles, number-crunching suggests a twelve-digit valuation isn't out of the question.

The first question is how big the overall market can get. Say e-commerce in China grows 35% a year for the next two years, and that Alibaba can keep its current market share of around 80%. That would give it just under $300 billion of transactions in 2014 - over four times what eBay's marketplaces handled in 2012.

The next question is profitability. Apply a 30% operating profit margin -- roughly the level in September 2012, the last period for which there are reported numbers -- and the 15% tax rate many of China's high-tech companies enjoy, and 2014 earnings would be $3.8 billion. On a forward earnings multiple of 25 times, the recent average for listed Chinese gaming network Tencent, that suggests a market value of $95 billion.

Since a twelve-digit valuation is within reach, it makes sense for Alibaba to open the cave sooner rather than later. Yahoo owns 24% of Alibaba Group.

Here's a look at the four top tech investments that will lead the charge during the next few years: Qualcomm (QCOM), Yahoo (YHOO), Netflix (NFLX), and Hewlett-Packard (HPQ).

Investors Finally Screaming "Yahoo!"

What happened to YHOO? It was a story stock once, if you can remember back that far. During the tech bubble at the start of the millennium, shares of YHOO hit $125, but just as quickly as they rose, so too the fall. The stock hovered around lows of $4 for a few years before making a three-year bull-run to $40, where it traded in range until falling back to the $15 level. It was only late last year that YHOO once again broke out of the trading range. Since September 2012 the stock has risen 63% on solid volume, and it is my belief that the company is back to stay.

We've seen the incredible influence that great leadership can have on a stock price. Remember the Steve Jobs story at AAPL? Or Michael Dell's run with his startup-turned-conglomerate DELL? It seems that newly appointed (July '12) President and CEO Marissa Mayer is having the same influence on shares of YHOO. The stock was embattled for a long time. Investors always believed in the potential that YHOO had, but no company leader ever had the gumption and foresight to rev the engines since the tech bubble in 2000.

Investors finally have reason to believe in the future of YHOO. Under Mayer's leadership, the company has already rewarded shareholders with $2.2 billion in share repurchases with $778 million more in repurchases already allotted for the current fiscal year. Additionally, Mayer has leveled the wobbling ship - both revenues and EBITDA were unchanged year over year. Additionally, the company has increased its net margin significantly - from 27% in Q1 2012, to 37% in Q1 2013. The increase in profitability is a telling sign for the direction of YHOO. If Mayer can spur top line growth in addition to the increasing margins, YHOO will be a catalyst for the tech movement going forward.

Yahoo! announced a new app for iPhone and iPod Touch, which integrates Summly, CEO Marissa Mayer's latest acquisition.

The app utilizes Summly's technology, which turns longer-form news stories into quick summaries for readers. "We acquired Summly less than a month ago, and we're thrilled to introduce this game-changing technology in our first mobile application," Mayer wrote on Yahoo!'s blog. "And, with the immersive imagery of our virtually endless newsfeed, the new Yahoo! app has both great technology and beautiful design front and center."

The new Yahoo! app not only includes Summly and a redesign, it also includes better video and image search as part of the experience. The new app is available in the U.S.

China’s e-commerce market racked up a whopping 1.3 trillion RMB ($190 billion USD) worth of transactions in 2012, according to a report by the China Internet Network Information Center (CNNIC) (linked article is in Chinese), an increase of 66.5 percent over 2011′s total.

While the latest figures from CNNIC are impressive, China’s e-commerce market still has plenty of room to grow and is set to overtake America’s. As this Economist story notes, the Chinese e-commerce market is currently dominated by Alibaba Group, which last year handled 1.1 trillion yuan ($170 billion USD) in sales through two of its portals, Taobao and Tmall, and is on its way to becoming the first online retail company in the world to handle $1 trillion a year in transactions. Taobao is a C2C marketplace with more than 800 million product listings and 500 million registered users, according to Alibaba. B2C platform Tmall counts major international brands like Microsoft, Nike and Unilever among its 50,000 merchants.

Yahoo owns 24% of Alibaba Group.

Yahoo! grew its mobile user count to 300 million this quarter. At the end of 2012, that number was 200 million. To point out the obvious -- that's a tremendous win for the company. To point out another obvious -- mobile is a much more exciting future than display ads, so why are analysts kvetching over dwindling display ads? Yahoo! has much greater goals than that.

Moreover, the company's stake in Alibaba could send shares higher with an IPO right around the corner. Some analysts believe it will come out of the gates with a value of $80 billion. Another Asian property, Yahoo! Japan, is not yet monetized, but is worth billions more. The result leaves Yahoo!'s core business -- its forgettable display ads -- as a very small piece to a very big company.

-- Internet giant Yahoo launched an online shop, Yahoo Outlet, in Hong Kong selling discounted branded products ranging from apparel, electronic devices and hobby items to home decor and appliances.

Yahoo plans to release an in-house weather app for iOS and an iPad version of its Yahoo Mail app as soon as tomorrow, according to a person familiar with the apps.

The iPad version of Yahoo Mail is optimized for the iPad’s larger screen, and it is already available for the iPhone and iPod touch. Late last year, Yahoo released a redesigned version of its iPhone application that focused on speed and intuitiveness.

Yahoo’s new weather app is notable as the company already is in a partnership with Apple to provide the data for the Weather app pre-installed on all iPhone and iPod touch models…

Yahoo already offers a search app, an Axis web browser app, a Yahoo Finance app, and more for Apple’s iOS devices.

Recent reports have said that Yahoo and Apple executives have been meeting to discuss ways that the two companies can further their partnership. Besides Weather, Yahoo provides data for iOS’s Siri and Stocks functions. Yahoo search is also an option for the Safari browser.

The focus for Yahoo investors shouldn't be CEO Marissa Mayer's turnaround efforts, but the value of its Asian assets, say analysts.

"Those Asian assets are on fire from our perspective," DiClemente said. Yahoo owns 24 percent of China e-commerce firm Alibaba Group and 35 percent of Yahoo Japan."

Kessler agrees. "If you look at the investments in Yahoo Japan and Alibaba Group, as well the significant cash and investments what you have is arguably value that constitutes more than half Yahoo's market capitalization," the S&P Capital IQ analyst said. "That we think is really going to be the driver for potential realized value in the quarters to come."

Eric Jackson says most people who are investors in Yahoo! look at the investments in Alibaba and Yahoo! Japan first and foremost. I think Alibaba IPOs in the second half of this year for over $80 billion. The stake in Yahoo! Japan is worth $10 billion now (pre-tax), double what it was back in December.

That means, on an after-tax basis, you're getting the Alibaba and Yahoo! Japan investments, plus Yahoo!'s cash (over $5 billion) for $25 billion out of the total market cap of $26.5 billion.

Apple has the cash to buy both Twitter and Yahoo! and that would totally change the landscape for mobile phone competition. If I was Tim Cook, I'd put Marissa Mayer in charge to run it and try and ensure that the cultures of Twitter and Yahoo! was left alone from the rest of Apple. They are very different cultures.

Eric Jackson-