Yahoo! Inc (NASDAQ:YHOO) needs to display a new face - GOOG, FB

Northern, WI 04/17/2013 (avauncer) - The Biggest web portal in the United States, Yahoo! Inc (NASDAQ:YHOO) (Closed: $23.79, Down by 0.79%) has been losing its advertisers to competitors such as Google Inc (NASDAQ:GOOG) (Closed $793.37, Up by: 1.46%) and Facebook Inc (NASDAQ:FB) (Closed: $26.92, Up by 1.51%). Its forecasts fell below analyst’s estimates and share values dipped in extended trading. On its website, the Sunnyvale, California-based Yahoo said that its second quarter sales with the exclusion if the revenue that is passed to partner sites is estimated to be close to $1.09 billion. The analyst’s average revenue projection had been $1.11 billion.

Higher expectations
According to a prominent market watcher, the Chief Executive Officer Marissa Mayer has been making every effort to up the company’s marketing revenue even as customers have cold-shouldering the Yahoo banner ads and veering towards the considerably lower-price targeted promotions that Facebook and Google have been offering. He estimates that Yahoo’s U.S market share will shrink from 9 percent that it stood at, in 2012, to 7.7 percent in the current year. The revenue guidance is disappointing and Yahoo is one company that is expected to deliver steady revenue growth.

No profits to display
Display advertising sales dipped to $455 million by 11 percent from a year earlier. This has been much lower than expected and is an indication that Mayer is not making enough of an effort to attract advertisers which at the moment should be her highest priority. The way it stands, the display business is extremely weak and an effective turnaround is going to take a lot of time. Search revenue with the exclusion of sales that were passed to partner sites dipped by 10 percent. Yahoo said that profit with the exclusion of the three cents that are related to stock-based compensation, was 38 cents per share in comparison to the 27 cents that it stood at, a year earlier.

The magic lamp
Last year the company had announced that proceeds from the sale of some of its Alibaba Group Holding Ltd stake will be distributed amongst shareholders. As a follow-through of that plan, in the first quarter, Yahoo had bought back $775 million in shares. The company is also restructuring its web properties and innovating on the mobile services front to make Yahoo more attractive to users who prefer smartphones to PC’s. Mayer has been acquiring small software start-ups in an effort to add talent to the company and rekindle growth. Google is expected to retain its lead with an 18 percent share in the U.S display ad-market while yahoo is expected to hold 16 percent.