Yahoo Financial Analysis

Essay by coach0219University, Master'sA, March 2006

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Executive Summary

Yahoo! Inc.has placed itself in the top spot among Internet portals, by attracting approximately 232 million visitors each month worldwide. It not only offers a directory and search engine, but also features a collection of communications, commerce, and content services with over 25 international sites in 13 languages.

Yahoo! produces much of its revenue from banner advertising and sponsorship ads, while also obtaining fees through subscription and business services, such as SBC Yahoo! DSL and Dial, Yahoo! Personals, Small Business Services, Yahoo! Mail, and Yahoo! Enterprise Solutions. Customers paying fees rose to 8.4 million, from 4.9 million last year, reflecting growth in these services.

This paper examines the corporation's customers and competitors, the industry it operates in, and industry and environmental trends affecting it. Furthermore, key financial ratios within the firm and its industry, development of growth scenarios, and stock valuation models are discussed. The sensitivity analysis generated will be used to determine Yahoo!'s financial performance.

There was no DCF model used in this research since Yahoo! does not pay dividends.

Based on our research of stock price analysis, our recommendation is to BUY. This analysis was formed based on the analysis of the market and the industry that Yahoo! operates in. The financial data that was accumulated for this project is in tune with our recommendation.

Overview

Yahoo! is the number one Internet brand globally and reaches the largest audience worldwide. They service more than 232 million people each month worldwide. Yahoo! is a global Internet communications, commerce and Media Company that helps Internet users navigates the World Wide Web. Yahoo! Has the largest global audience. They also have the greatest breadth of wireless products and services of any web provider. Yahoo! offers a broad array of communications, commerce and content services that lead consumers to...