Yahoo CEO's juggling act
Does Marissa Mayer have the vision to bring the company back?
Yahoo (YHOO) CEO Marissa Mayer has got to convince Wall Street that she's the right person with the right plan to lead the Internet portal back to its former glory. And while it will take some time to prove that point, Mayer got off to a good start Monday.
When Google (GOOG) reported worse-than-expected results last week, many thought that wouldn't bode well for Yahoo. This naysayers were wrong. Yahoo's net income rose to $3.16 billion, or $2.64 per share. Excluding one-time items, profit was 35 cents. Revenue excluding traffic acquisition costs -- the fees Yahoo pays to partners -- rose 2% to $1.09 billion.
The earnings beat Wall Street's low expectations of profit of 25 cents on revenue of $1.08 billion. Investors need to remember that it's not a big accomplishment to outperform expectations if people don't expect much.
Mayer, who joined the Sunnyvale, Calif., company in July from Google, has got about $2 billion in cash at her disposal. Some investors, including activist and board member Daniel Loeb, want the Internet publisher to pay a special one-time dividend.
While everyone likes cash -- Jimmy Fallon's Capital One (COF) commercials prove that point -- that's not a strategy. Investors will want to know what comes next, the key question Mayer has got to answer.
Media reports indicate that Mayer is focused on the "user experience." That's good because Yahoo's main sites (news, sports and finance) are in dire need of a redesign. A bigger issue is its content strategy. Yahoo partners with news outlets such as CNBC and ABC News to provide content and creates some on its own, which is very good. Advertisers pay higher rates for exclusive content than for articles that appear on multiple sites. The downside, of course, is that creating original content can be expensive.
Mayer is like a plate-spinner at the circus who needs to keep a close eye on everything to make sure its running correctly, because if one plate falls to the ground, odds are that others will follow.
--Jonathan Berr does not own shares of the listed stocks. Follow him on Twitter @jdberr. This post has been updated with earnings data.
More from Top Stocks
- Hasbro earnings battered by boys' toys
- Housing recovery can't save regional banks
- What to expect from Apple on Tuesday
MORE ON MSN MONEY
Copyright © 2013 Microsoft. All rights reserved.
Quotes are real-time for NASDAQ, NYSE and AMEX. See delay times for other exchanges.
Fundamental company data and historical chart data provided by Thomson Reuters (click for restrictions). Real-time quotes provided by BATS Exchange. Real-time index quotes and delayed quotes supplied by Interactive Data Real-Time Services. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by SIX Financial Information.
All hail the bull market, which ended the week with a big rally. But it also is starting to look a little like 1987, which suffered an epic blow-out.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.