Business overview: An investor's guide to Yahoo (Part 1 of 6)
Yahoo! Inc. (YHOO), together with its consolidated subsidiaries, is a global technology company that provides a variety of products and services, many of them personalized, including search, content, and communications tools on the web and on mobile devices. As of February 4, 2014, Yahoo has an enterprise value of $31.57 billion, with a trailing PE ratio of 27.7x. The stock, however, has fallen 8.7% since the company reported results last week that failed to meet investors’ expectations.
Yahoo’s products and services
The company is based in Sunnyvale, California. Its mission is to make the world’s daily habits inspiring and entertaining.
The company generates revenue principally from display advertising on Yahoo! Properties and some affiliate sites and from search advertising. Other revenue sources include listings-based services, facilitating commercial transactions, royalties, and consumer and business fee-based services.
Over the past year, Yahoo has invested in product enhancements and revamped its Mail, Finance, Homepage, Search, Messenger, News on mobile web, and Flickr products. The company recently launched digital magazines Yahoo Food and Yahoo Tech for online users, and Yahoo News Digest for mobile. Yahoo also introduced Yahoo Smart TV, which offers highly personalized program recommendations from TV, video on demand, and web services, along with complementary content related to the show.
Yahoo operates Yahoo.com, which offers Yahoo! Search, Yahoo! News, Yahoo! Finance, Yahoo! Entertainment and Lifestyles, Yahoo! Video, and Yahoo! Toolbar (a web browser add-on). The company also provides communications tools, including Yahoo! Mail (which provides users with email, instant messaging, and mobile text messaging as well as integrated contacts and calendar functionality) and Yahoo! Messenger (an instant messaging service). Plus, the company offers mobile and emerging products, including IntoNow from Yahoo! for watching TV and Yahoo! Connected TV, a software platform that provides interactive television. The company provides user-generated content products, such as Yahoo! Groups, Yahoo! Answers, and Flickr (which allow users to create, share, and discover ideas, interests, and photography). Yahoo also owns micro-blogging platform and social networking website Tumblr.
Further, Yahoo offers a range of marketing services—such as display advertising, search advertising, listing-based services, and commerce-based transactions to advertisers—and APIs, such as Yahoo! Developer Network, Cocktails, Yahoo! Query Language, Yahoo! User Interface, Search BOSS, and Yahoo! Flickr API for third-party developers, advertisers, agencies, publishers, and designers.
A brief history
Yahoo has a storied history that has evolved with the Internet, beginning in 1994 when its founders, Jerry Yang and David Filo (then graduate students at Stanford University), created Jerry and Dave’s Guide to the World Wide Web, a simple directory of websites to help people navigate the Internet. Yahoo was incorporated in 1995 and is a Delaware corporation. The company completed its initial public offering on April 12, 1996, and the stock is listed on the Nasdaq Global Select Market under the symbol “YHOO.”
The majority of the company’s product offerings are available in more than 45 languages and 60 countries. Yahoo has offices throughout the Americas, Asia Pacific (or APAC), and Europe, the Middle East and Africa (or EMEA).
For more Yahoo analysis, see the Market Realist series Evaluating Marissa Mayer’s Yahoo turnaround.
Browse this series on Market Realist: