16 июл. 2006 г.

Yahoo, Google report to Wall Street next week

Donna Bogatin:

“Google and Yahoo are still benefiting from the increased willingness of marketers to buy ads based on keyword searches,” so say analysts in advance of next week’s second quarter earnings reports due out, as reported by CNNMoney:

Even though both companies reported strong first quarter results and have continued to unveil new features to help drive more viewers to their sites, shares of Yahoo and Google are trading at lower prices now than after their first quarter numbers were released in mid-April. However, Google and Yahoo do have some momentum. Since Yahoo hit a 52-week low in mid-May, at a time when the entire tech sector was in a swoon, the stock has rebounded sharply, gaining 11 percent. Google's stock has also gained ground since mid-May, rising 10.5 percent…there's a good chance shares of both companies will keep climbing since each will probably report solid second-quarter earnings.

PiperJaffray will be focusing on:

YAHOO Brand Advertising.

Large brand advertisers have indicated substantial increases in online advertising budgets in 2006, with continued high ad spending in sectors such as automobiles, personal electronics, and financial services. Much of this increase will be in search where Yahoo remains a solid No. 2 player, these large branded advertisers will likely continue to increase their spending in banded online advertisements where Yahoo is the undisputed leader. We expect the growth to accelerate through the year from the modest upside Yahoo produced in Q1 as budget allocations become available, which gives us confidence that Yahoo could once again see upside to our $342M core advertising estimate.

GOOGLE Margins

Although we believe additional spending may pressure margins slightly considering the announced distribution deals with Dell and Adobe, we continue to believe that the incremental investments will further solidify Google’s leadership position in the marketplace and lead to continued share gains over the long term. We expect Google to highlight the recent Google Checkout product…consumer and merchant adoption, incremental effect on revenue and costs and details regarding fraud prevention/liability mitigation…progress with extending the Google platform beyond paid search…Print, Radio, WiFi…

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