S.G. Cowen Securities Corp's Scott Reamer, who last year told investors to bet on Yahoo Inc shares falling, has changed his tune.
The analyst spent three days last week meeting with advertising executives and Monday raised his rating on the most popular Internet search service to "neutral" from "sell." The stock may rise more than 13 percent this week, when Yahoo hosts its own meeting with media buyers, he wrote in a report.
"In our talks with agencies, this was the first time we ever had positive feedback on Yahoo," Reamer wrote. The company is "trying to offer better solutions to advertisers, rather than the standard `this is what we have' pitch."
Yahoo, which got about 90 percent of its revenue from advertising last year, is working to "accommodate" requests that go beyond printed messages, Reamer said. In March, the company broadcast teen pop star Britney Spears' Pepsi commercial before its network premiere during the Academy Awards. PepsiCo bought all of Yahoo's home page ad space in the two days before the Oscar telecast.
Such ideas may help Yahoo attract clients such as packaged-goods companies as it makes up for a drop in advertising from dotcom companies, which have accounted for as much as 60 percent of Yahoo's revenue.
Reamer said he now expects Yahoo to meet its estimate of US$167 million in revenue and earnings of US$0.01 a share for the second quarter. While it's likely to rise this week, the stock, which today rose US$0.32 to US$19.78, is still pricey at 460 times expected 2001 earnings, he said.
Reamer found in the meetings with advertisers that spending on interactive ads may improve and Fortune 500 companies are once again "taking meetings with Internet media concerns," he wrote.
Cost-per-thousand rates, or the amount an advertiser pays for every 1,000 times an ad is viewed, either in print or online, have stabilized after falling, he said.
Alan Loewenstein, a manager of the US$1.4 billion John Hancock Technology Fund, who sold his Yahoo shares in March 2000, said such checks are important as he tries to find the right time to buy Yahoo shares again.
"The Internet will be a viable method for contacting consumers. As we go forward, more advertising dollars will go toward the Internet and away from television," he said.
Yahoo met Monday with more than 125 advertisers in Princeton, New Jersey. Co-founder Jerry Yang is expected to speak. The event includes a wine tasting.
Yahoo shares reached a high of US$250.06 on Jan. 4, 2000 and have since tumbled 93 percent. That lopped off US$142 billion of stock market value, the equivalent of a company the size of Merrill Lynch & Co, General Motors Corp and DuPont Co combined.
Reamer, who has a bachelor's degree in chemical engineering, has followed Internet and media companies since 1994 and Yahoo since its initial stock sale in 1996.
Yahoo, which has traded between US$17 to US$22 in the past month, could rise above US$22 this week given the advertising outlook, Reamer said, so he also rates the shares a "trading buy." His longer-term rating of "neutral" will remain until ad budgets rise faster than expectations and there is proof Yahoo is capturing the increase, he said.
In December, Reamer also had a "neutral" rating on Yahoo when he recommended investors "short" the stock. The shares have since fallen 31 percent.
He issued the "sell" rating in March, in part because he wanted evidence it would move away from its dotcom advertising base. He now expects advertising to account for about 79 percent of revenue this year and 70 percent in 2002.
Among the 20 analysts who rate Yahoo a "hold" are Merrill Lynch & Co's Henry Blodget and UBS Warburg's Christopher Dixon, according to Bloomberg data.
Eight analysts, including Morgan Stanley Dean Witter's Mary Meeker and Lehman Brothers' Holly Becker, rate Yahoo shares "buy." The remaining five rate Yahoo "sell."
LANDMARK: Taiwan and Haiti are set to mark the 70th anniversary of diplomatic relations next year, the president said, adding that the two would deepen bilateral ties President William Lai (賴清德) yesterday pledged continued support for Haiti, particularly in food aid and healthcare, as the Caribbean nation faces ongoing social and economic challenges. Speaking at a meeting with Haitian Minister of Foreign Affairs Jean-Victor Harvel Jean-Baptiste, Lai said Taiwan would step up bilateral cooperation to help improve Haiti’s social infrastructure. Taiwan would continue supporting Haiti through initiatives aimed at improving healthcare, food security and overall development, he said. Taiwan and Haiti are set to mark the 70th anniversary of diplomatic relations next year, the president said, adding that the two nations would continue to support each other and deepen bilateral
MONTHS OF WORK: The core mission of Taiwan’s negotiators is to safeguard the national interest, public health and food security, President William Lai said Taiwan is still hoping to reach a deal with the US in ongoing tariff talks after it was not among the first batch of 14 nations to receive tariff notification letters. The US issued its first batch of tariff notification letters on Monday, but Executive Yuan spokeswoman Michelle Lee (李慧芝) yesterday confirmed that Taiwan has yet to receive one. Vice Premier Cheng Li-chun (鄭麗君) and Minister Without Portfolio Yang Jen-ni (楊珍妮), who lead the Office of Trade Negotiations, are in the US negotiating the tariff issue, the Executive Yuan said yesterday. The US in early April announced sweeping tariffs on imported goods, including
The New York Yankees are to host Taiwanese Heritage Day for the first time this year, the event’s organizer announced on Monday. The annual event, which has been held nearly every year since 2005, has often been hosted by the New York Mets at Citi Field, but this year it would be hosted by the New York Yankees on Sept. 10 at Yankee Stadium, organizer ROF International Sport Marketing wrote on social media. The event, which is being co-organized by the Taiwanese Chambers of Commerce of North America (TCCNA), is one of many cultural events hosted by the Yankees, the announcement said,
DRILLS FOR 10 DAYS: The exercises would continue around the clock under realistic conditions taking into account all possibilities, the defense ministry said Taiwan yesterday launched its largest-ever military drills intended to guard against Chinese threats to invade, including using “gray zone” tactics deployed by China that stop just short of open warfare. This year’s 10-day live-fire Han Kuang exercises are the longest yet and follow the delivery of a range of new weaponry from tanks to uncrewed waterborne drones. The drills began with exercises to counter the actions of China Coast Guard and maritime militia ships that have been harassing Taiwanese vessels around outlying islands close to the Chinese coast, the Ministry of National Defense said. Cyberattacks and misinformation campaigns are seen by Taiwan as
RSS