Time to add YHOO

[aiki14]

Time to add. I'm believing the analysts at this point, I think we've seen the bottom and it should run for the foreseeable future. Breakout through the 50mma and the next resistance is at 29. I bought after the drop 5 weeks ago and am up a buck and a half after a disconcerting fall to 23, I am adding to my position over the next few days. We'll see.
Merrill reiterated the Buy yesterday.

[Empire]

With what justification? Not that I'm disagreeing; it just seems that most people's reasons for the outperforms are technical, with little mention of them digging out of their fundamental holes. I personally think Yahoo is an exceptional product run by a shitty company. Certainly a great long term play in my book, but I plan on waiting for some sign of upper level mutiny or something haha.

[scottykaps]

Right now yahoo is in talks to buy time warner. Cramer said on TV that if yahoo doesn't make a move and buy something - they are going to go nowhere.

Personally, I also recently purchased YHOO because I also believe that they hit rock bottom and will finally be making a rebound.

[Will]

Right now yahoo is in talks to buy time warner. Cramer said on TV that if yahoo doesn't make a move and buy something - they are going to go nowhere.

Personally, I also recently purchased YHOO because I also believe that they hit rock bottom and will finally be making a rebound.

I might wait for a solid bounce off support.
When I see that 'W' formation, I'm with you.

[aiki14]

This is from a Merrill Lynch research report from today.
Attractive entry point
Down 35% YTD, Yahoo is at an attractive entry point entering a
seasonally strong holiday period and in front of a two-year search
monetization upgrade cycle, in our view. Two weeks ago, Yahoo!
formally launched new search campaign management tools and, though
monetization improvements won’t meaningfully kick in until 2H07, we
think 4Q estimates are washed out and 2007 buy-side expectations are
likely lower than sell-side forecasts (Street at 19% growth in 2007).
Strong assets, well positioned for Online ad migration
Yahoo! has many, now seemingly underappreciated, assets, including:
largest global user base, 24% YoY 3Q page view growth, No. 2 video
stream share (ahead of YouTube) and No. 2 search query share.
Industry data indicates that Yahoo! generates around $0.04 per US
search, versus $0.11 per Google, a 65% discount, which underscores the
Project Panama search monetization opportunity, estimated at more than
$500mn in revenues ($0.25 in EPS) over two years.
Risks to our upgrade
Risks are: Panama transition risk in 1H07, Google should continue to
take affiliate share (better search monetization), social networking ad
inventory competition and a Yahoo! negative page view growth mix
(low-quality pages growing faster). We think it could be too late to buy
stock in 3Q07 when Panama rollout risks have passed.
Valuation risk/reward favorable, in our view
Our 12-month price target is $32, based on 25x 2007E FCF plus
$7/share in asset value. We estimate a downside case of $22/share for
Yahoo! using a 10x multiple on lower-than-consensus 2007E EBITDA,
13% below current levels.
Key positives for Yahoo!
Secular advertising trends favor the Internet
We expect global Internet advertising to reach $28bn in 2006,
and grow at a 19% CAGR to $50bn by 2010 (see table at left).
Internet advertising growth will be driven by: (1) the increasing
penetration of Internet usage as a percentage of total media
time; (2) improving monetization of Internet usage through
improved branded ad targeting and paid search relevancy
improvements; and (3) emergence of new Internet activities
(social networking, video, etc). We think advertisers will
increasingly turn to the Internet as other advertising media is
impacted by increased use of DVRs, an increase in paid satellite
radio subscribers and a reduction in newspaper subscribers.
Yahoo! remains the most highly visited Internet property, attracting 130mn unique visitors and
40bn page views in the US in September. Although growth of social networking activity has
primarily been away from Yahoo!, it has built some social networking assets (over 10mn visitors
to Yahoo Answers in September). We believe that the company can leverage its industry position
to benefit from all forms of Internet usage. Yahoo! has numerous properties such as Mail, Sports,
Local and some social networking sites such as Answers and Flickr, which have likely been
undermonetized. We expect increased focus from the Yahoo! sales team on lower-value
inventory, coupled with Yahoo!’s recent agreement with Right Media (including 20% ownership
investment) to help drive additional ad revenues for Yahoo!
Search revenue outlook has room to improve
Based on Google’s revenue growth outperformance in 2006, Street sentiment on Yahoo!’s Project
Panama revenue opportunity has deteriorated, which provides Yahoo! stock with upside
opportunity, in our view. We are optimistic on Project Panama, which we expect will close
Yahoo!’s search monetization gap relative to Google. Using comScore data as a proxy for total
queries, we estimate that Google is currently generating $0.11 per US search, about 3x Yahoo!’s
$0.04 per search, based on our estimates for domestic search revenue.
Our checks with search marketing firms have been generally positive on Yahoo!’s monetization
opportunity and we are currently modeling a steady improvement in RPS over the next several
years (8% in 2007 and 13% in 2008), which would take revenue per search up to around $0.05 in
2008. Assuming a more positive outcome for RPS in which Yahoo closes the gap to Google by
roughly 50% in 2008, RPS could increase to $0.07 in 2008 and result in $550mn upside to our
current forecasts for Yahoo!’s net revenue. Our downside case is that RPS remains at $0.04 in
2008, and Yahoo loses some affiliates to Google.
Video assets seem underappreciated
The impressive growth in users and video streams at YouTube has ignited
greater enthusiasm around the potential of Online video advertising,
expected to reach $640mn in 2007 and grow to $1.5bn by 2009 (per
eMarketer). Following Google’s acquisition of YouTube, Yahoo!’s
strength in video seems to be an underappreciated asset. Yahoo! has a
leading video presence, generating the second-most video streams, behind
Fox Interactive but still slightly ahead of the combination of Google and
YouTube (per comScore Video Metrix data for August). Yahoo! also had
the most unique streamers in August, but will most likely fall to second
behind the combination of Google/YouTube. We believe Yahoo! can build
on its strong position and remain highly competitive in attracting video
advertising. Yahoo! is currently focused on increasing volume rather than
pricing in the nascent video market. However, we expect Yahoo! to
leverage its extensive Internet reach of consumers, strength in display and
experienced sales team to drive penetration of video advertising and
increase pricing during the next few years.

[Imperator]

would you say that I should swap out of Google and go to Yahoo then?

[ub3rn00ber]

Why swap? why not just take some profits? If i had gotten in at 400 i would sell some and keep some... just me though...

[Blackark]

Right now yahoo is in talks to buy time warner. Cramer said on TV that if yahoo doesn't make a move and buy something - they are going to go nowhere.

Personally, I also recently purchased YHOO because I also believe that they hit rock bottom and will finally be making a rebound.

They are in talks to buy AOL FROM Time Warner.
Glad I don't trade off what's posted here, you guys are dangerous man!

[TonyM]

They are in talks to buy AOL FROM Time Warner.
Glad I don't trade off what's posted here, you guys are dangerous man!

TWX would be laughing all the way to the bank if they manage to unload that worthless pos on YHOO. Since Yahoo is so adept at growing themselves lately, I wouldn't doubt that they somehow see value in that purchase, AOL is over and it might be the last nail in Yahoo's coffin if they buy it. At least TWX bought them when they actually had customers.

[clavocat]

They are in talks to buy AOL FROM Time Warner.
Glad I don't trade off what's posted here, you guys are dangerous man!

ha i bought it recently and made some dandy cash while the market has sucked balls. :wink: do i care about fundamentals? nope, the TA looks beautiful though...might take profits soon.

[Blackark]

ha i bought it recently and made some dandy cash while the market has sucked balls. :wink: do i care about fundamentals? nope, the TA looks beautiful though...might take profits soon.

Are you talking about YHOO or TWX :p

[clavocat]

yhoo and up again!!!