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NASDAQ: YHOO

NASDAQ: YHOO. 2/28/2012 Turner Novak Mark Blazo. Buy 100 shares @ $21.31 $2,131 4.71% of portfolio. Yahoo Overview. Founded in 1995 Sunnyvale, CA 14,100 employees. Yahoo Today. 2 nd largest online advertising platform 240+ Million users. Personalized digital content

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NASDAQ: YHOO

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  1. NASDAQ: YHOO 2/28/2012 Turner Novak Mark Blazo

  2. Buy 100 shares @ $21.31 • $2,131 • 4.71% of portfolio

  3. Yahoo Overview • Founded in 1995 • Sunnyvale, CA • 14,100 employees

  4. Yahoo Today • 2nd largest online advertising platform • 240+ Million users • Personalized digital content • Communications, Search, and Media • Not just a search engine

  5. Yahoo Tomorrow • New executive team • Hire/Buy talented employees/programmers • Transition from media to mobile • Monetize mobile offerings • Improve advertisers capabilities to create and manage their own ad campaigns across Yahoo’s network

  6. Q4 Earnings Call Takeaways • Revenue was flat • Earnings up • Lots of excess cash • Continue share buybacks • Continue acquisitions • Commercializing and monetizing products • Transition from display ads to mobile ads • Just under 200 million mobile users

  7. Q4 Earnings Call Takeaways • Currently 75 mobile apps • Reducing to “about 12” • Remodel the 12 apps that will stay in the portfolio • Continue acquiring companies between $10 - $100 Million to buy talented programmers

  8. New Management Team CEO - Marissa Mayer • Google’s 20th employee • VP of Search Products, User Experience, Local, Maps, and Location • Developed Google’s Search and Contextual Discovery • Very involved in hiring new Google employees • Part of 20 acquisitions at Google • Programmer – Unlike previous Yahoo CEO’s

  9. New Management Team CFO - Ken Goldman • Three decades of experience in software and internet companies • History of fiscal discipline and internal controls • COO – Henrique de Castro • Brought in to repair Yahoo’s relationship with big ad agencies • Built Google’s display advertising business from scratch • Monetized Youtube

  10. New Management Team VP of People – Jackie Reses • Experience in Private Equity investing in media and technology • Training and development of new employees • Firm grasp of acquisitions through PE experience • CMO – Kathy Savitt • CEO of Lockerz • CMO of American Eagle • VP of Amazon • In charge of worldwide marketing and branding

  11. Institutional Ownership • Greenlight Capital, David Einhorn • Predicted the downfall of Lehman Brothers • Exposed accounting and inventory problems at Green Mountain Coffee Roasters • First to discover disclosure changes at Herbalife • Third Point Capital, Daniel Loeb • Exposed previous Yahoo CEO resume blunders • Pitched for Mayer to become new CEO

  12. Strategy for Growth • Not moving away from media completely • Media Technology company • Tangible products, not just a website • Integrate products with users lives • Increase search market share • Bring in talented employees • Acquire small, “failed startups” with talented programmers

  13. Current App Portfolio

  14. Flikr vs. Instagram

  15. Investments in Other Companies

  16. Yahoo’s Value Core Business 21.44 x 29.6% = $6.35 per share • 13.2 • 11.7 • 3.1 • + 1.6 • 29.6%

  17. Yahoo’s Value • Bought 40% stake in Alibaba (Chinese Amazon) in 2005 for $1 Billion • Sold half of it for $7.6 Billion in 2012 • Remaining stake is valued at $7.6 Billion at current Total valuation of $38 Billion • Projected IPO by the end of 2014 • Expected to be valued up to $150 Billion

  18. Yahoo’s Value

  19. Risks • Strategic search alliance with Microsoft • No operating system of its own • Not necessary for apps • Many different platforms/apps make it difficult for Yahoo to appeal to advertisers • Lowering number of apps • Yahoo is a tech company • Also a media company

  20. Investment Thesis • Capable management team in place • Cash available to spur growth • Mobile use globally will continue to increase • There is no clear “Apple” of mobile products • Will it be Yahoo?

  21. Buy 100 shares @ $21.31 • $2,131 • 4.71% of portfolio

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