Yahoo’s investors have 8.8 billion reasons to stick it out with the company for a couple more years, as CEO Jerry Yang projected that as the company’s 2010 revenue figure.
Jerry Yang, CEO Yahoo! Inc.
(Photo Credit: Wikipedia)
Whatever happened in last week’s banker-free discussion between Yahoo and Microsoft must not have swayed the purple people from Sunnyvale.
Yahoo dropped a PowerPoint presentation in the mail to the Securities and Exchange Commission, featuring their forward-looking predictions for the coming couple of years. As Valleywag observed, the key prediction targeted $8.8 billion in revenue in 2010, based on the potential for display advertising to take flight in a big way.
Yang has two strategies in play, pointed at the target of shareholder joy and profitability. One is called Starting Points, the other Must Buy:
Starting Points: In support of the Starting Points objective, which focuses on properties that users return to many times a day to start their Internet experience, the presentation discusses Yahoo!’s initiatives to make its front pages, Yahoo.com and My Yahoo!, as well as search, mail and mobile more open, social and relevant to users. The presentation highlights Yahoo!’s leading positions in key starting points, including the 305 million unique monthly users of its homepage and the 262 million unique monthly users of Yahoo! Mail.
Must Buy: The presentation also highlights the Company’s Must Buy strategic objective, which focuses on making it easier for advertisers, agencies, publishers and ad networks to do business with Yahoo! and with one another. Key initiatives include the development of a new ad platform designed to simplify online advertising buying and selling as well as improvements to the Panama search advertising platform.
In addition to its leading position in display advertising distributed on its owned and operated sites, Yahoo! is also the second largest provider of sponsored search advertising online. Yahoo! also operates Right Media, the leading online advertising exchange, and is now ranked among the largest online advertising networks with premium partners including eBay, Comcast, AT&T and many more.
The presentation notes that, in addition to Yahoo!’s strong projected operating results over the next three years, the Company’s strategic assets in Asia, including its stakes in Yahoo! Japan, Alibaba Group and Gmarket, its strong cash position, and its early leadership positions in mobile Internet and emerging markets, combine to create significant equity value.
If all goes well, Yahoo expectes to roughly double operating cash flow over the next three years from $1.9 billion to $3.7 billion and generate $8.8 billion in revenue excluding traffic acquisition costs in 2010.
Yahoo’s plan, as they note, exceeds current expectations for their success on Wall Street. That also summarizes how their stock dropped below $20 per share and left the door open for Microsoft to make a bid initially valued at $44.6 billion for the company.
Shareholders, especially the big institutions being battered by the present economy, now need to consider the question posed by the late Jack Palance when he used to host episodes of a certain show about strange and unusual events: believe it, or not.
