One of Yahoo's most important businesses stopped growing and could face a lot of questions on Monday
Yahoo CEO Marissa Mayer has long touted Mavens, short for mobile, video, native, and social revenue, as the company's new growth driver.
Indeed, Mavens business has grown into a $1.6 billion revenue business last year, after being almost nonexistent before Mayer arrived in 2012.
But Mavens growth came to a screeching halt last quarter, when it saw only a 7% year-on-year revenue increase in the first three months of the year.
That's a serious slowdown compared to previous quarters: Mavens grew 58% in the same quarter of last year, and 26% in the three months preceding last quarter.
Mavens will once again be under the spotlight come Monday, when Yahoo reports its second-quarter earnings. Another slowdown will be a serious blow to Yahoo and Mayer's legacy as CEO, as Mavens has been one of the few bright spots during her three-year tenure. It could also send Yahoo stock down as the company's other legacy businesses have already been in decline for years now.
"We will be looking closely at the performance of the Mavens segment to determine if Yahoo can offset the declines seen in its traditional advertising segments," RBC Capital Markets writes in a recent note.
Yahoo expects to see more than $1.8 billion in Mavens revenue this year, but RBC says that implies "relatively limited growth." On top of that, RBC forecasts further declines in Yahoo's traditional search and display revenues, which is why it expects revenue, excluding traffic-acquisition costs, to come in below consensus.
Here's what analysts are expecting, according to Yahoo Finance:
- Q2 adjusted earnings per share (EPS): $0.10, down from $0.16 in Q2 2015.
- Q2 Revenue: $1.08 billion, down about 13.4% from $1.24 billion in the year-ago period.
But all this could end up just being a mere sideshow on Monday, which is also reported to be the final deadline for making bids on Yahoo's core business. Companies like Verizon, AT&T, and a bunch of private-equity firms are reported to be in the race for Yahoo's internet business.
It's unclear if Yahoo will announce the buyer, or will decide not to sell itself after all on Monday, but in any case, it could mark the end of Yahoo's long, tumultuous history, according to BGC Partners.
"While we understand investor concern that a transaction does not materialize, we place faith on the new board members to end the process and complete a sale," BGC Partners wrote in a note Friday. "Yahoo is over in our eyes."
No comments:
Post a Comment