Yahoo to report earnings, though investors may focus on Alibaba

Yahoo will report on its first-quarter earnings after the market closes Tuesday evening, and Wall Street will be watching closely – but many investors will be focused on what Yahoo has to say about the performance of another company, the Chinese ecommerce service known as Alibaba, in the fourth quarter of last year.

High-flying Alibaba is expected to make its U.S. stock market debut later this year, but it hasn’t yet filed papers that would disclose details of its financial performance. Yahoo, however, owns a 24 percent stake in the company. And each quarter, Yahoo has revealed some of Alibaba’s numbers for the previous quarter. That means Yahoo will be reporting today on how Alibaba’s business fared during the winter holiday shopping season.

Yahoo’s own numbers are not expected to be great, if recent quarters are any indication.  While chief executive Marissa Mayer has been overhauling the company’s online services, its advertising business is still strugging. Most analysts credit Yahoo’s recent stock gains almost entirely to investor enthusiasm for Alibaba. As we’ve reported before, Yahoo will be selling off nearly half of its stake in Alibaba, which means Mayer will find her own performance scrutinized even more closely in the coming year.

Mayer’s been working on some new strategies, which she may discuss today. One involves a major expansion of Yahoo’s online video offerings – including a rumored push into offering new, original content. Just this week, Yahoo announced it has also extended a partnership with Vevo, a popular online platform for music videos and streaming live performances.

Analysts say they’d also like to hear more about Yahoo’s efforts to sell advertising on Tumblr, the social blogging service it bought for $1 billion, and reports that Mayer is also pushing Yahoo to develop its own Internet search capabilities. Yahoo has outsourced its search function to Microsoft in recent years.

(Image of Mayer and CFO Ken Goldman taken from webcast of Yahoo second-quarter earnings report in 2013)

 

Brandon Bailey Brandon Bailey (328 Posts)

Brandon Bailey covers Google, Facebook and Yahoo for the San Jose Mercury News, reporting on the business and culture of the Internet.