Can Yahoo Turn Its Core Business Around?

This transcript is automatically generated

Let's look at Yahoo! News Yahoo! shares are up 30% since Marisa Mayer took over CEO in July and -- -- -- -- -- but close today hopes are high that the struggling Internet giant -- -- shows signs of a rebound but my next guest does not convinced Yahoo! content.

It's -- business around joining me now is Rick summer morningstar's senior equity analyst direct thank you for joining -- the stock is up 30% but.

Is this or just based on hope.

But Marisa -- content things around and you haven't really seen signs of that yet.

Yeah I think -- a couple of things I think obviously sentiment changed there is some hope around Marisa -- -- -- can do.

But the other thing we can't forget the last six months we also has some liquidity and Alibaba Group as well.

One of their Asian assets which really materialized to a four billion dollar gain that's been a pretty good floor on the stock here today.

So what other big issues facing Yahoo! right now generating revenue of course but certainly seemed to be.

Slow extremely slow in getting hold of the mobile markets they do have some Smartphone apps out -- -- tablet apps are -- getting rave reviews again any money from it though.

Yes so you know we've we've seen this mobile problem rare it's sad and I think that FaceBook and Google that overhang has really in the at least let the stock price today.

But one of the -- to we're not seeing here we see clear path for FaceBook and -- the move towards mobile.

We don't see that for FaceBook you look at their core Internet portal strategy of yesteryear and how does that really par -- into a mobile environment.

You and I are logging onto a big giant Internet portal onto our mobile -- -- -- a lot less clear about how Yahoo! can really migrate and really innovate in that area.

-- -- Marissa Mayer has overseen the redesign of the email and an oval hole of the -- Photo sharing service.

Could you argue that she's being a little -- out of the gates was up being unfair.

Yeah I think it's a bit unfair I think that you know looking in the short run away she's got a real tough.

Challenge in front number you know looking -- anything that's really revolutionary it's tough now.

That being said what we really need to start to hear is about strategy a unique strategy how do you leverage Yahoo!'s core assets.

Is not clear to us what path that is but I will say.

Simply saying that we had a lot more mobile apps.

We're gonna have a little bit better culture that's not a clear path and it's not a great methods and our turn to investors.

Are we expecting to get guidance in this report -- if not how difficult has it been to you know us to make your projections.

Yes -- -- from our perspective we don't expect -- to come out you know we still can expect over the near term.

Yahoo! should continue to lose market share to Google to FaceBook around display and lose market share actually in an important part of what you searched still this company generates more than a third of its revenue.

After sharing with -- what's called tac or traffic acquisition costs.

More than a third of that revenue comes from search that's a real important component is going to be really hard.

For them to turn that business around as well -- -- -- and you know this partnership with Microsoft it sounds good but -- certainly hasn't -- the revenue expectations.

Can actually work or is it just a waste of time.

I think it was more of a cost initiative which is nothing that's not understood appropriately what it's not doing -- it doesn't drive.

Traffic to Yahoo! for search so while from a technology perspective it's a better solution for Yahoo!.

There's still competitors.

For you and I as a -- users of being is actually been gaining market share at the expense of Yahoo!.

And at this current price you think it's fairly priced -- or any room to the upside or do you fairly conservative -- your pricing outlook.

So you know what when there's there's probably some some upward bias that we can see but not a lot we're really looking at you know reported 41 dollars -- fare rises seventeen.

Yeah looking at the value of the Asian assets.

If they could hit it out of the park and execute -- successful turnaround there -- some outside here but we don't think that is risk reward appropriate right now.

-- -- -- Rick summer from Morningstar Rick thank you so much appreciate it cools specialized drilling that report to opt to the -- to keep it here for full coverage of Yahoo!'s results again off to the ballots coming up in just over -- half an hour just over an -- -- guess -- in five minutes so keep it right here on Fox Business Network solution to see what.

The analysts make of this latest report it is unfair to be critical I think -- -- -- is such a huge undertaking it.

But they gotta have some some strategy in place is what they're looking fall and not very encouraging not.

Watch Live

Can Yahoo Turn Its Core Business Around?

Details

Clips

Latest Technology

New Xbox Is the “One”

Tim Cook Defends Apple’s Tax Strategy

Apple Under Fire for Offshore Tax Avoidance

Microsoft Unveils New Xbox

70,000 Radio Stations in the Palm of Your Hand

Apple's Senate Tax Controversy

Apple Opens Up Debate on Corporate Tax Rate

Was Tumblr Acquisition a Good Move for Yahoo?

Yahoo Making a $1.1B Mistake?

Will Yahoo Get Its Money’s Worth from Tumblr?

Chinese Social Media Stocks a ‘Buy?’

What Can Tumblr Do for Yahoo?

Transcript

Recommended