– The Alibaba factor –
Yahoo is also a key shareholder in Chinese Web giant Alibaba, which is in the process of launching an initial public offering in the United States.
After an IPO, Yahoo, one of the early investors in Alibaba, has the right to sell its remaining shares.
The Chinese firm has not yet released details on its financing, but Yahoo’s figures showed Alibaba with a 2013 fourth quarter profit of $1.35 billion on some $3 billion in revenues.
The IPO is expected to be the largest in the tech space since Facebook’s in 2012, with Alibaba’s value estimated at some $150 billion.
Yahoo has a 24 percent stake in Alibaba, and is expected to sell around 10 percent of the capital at the time of the IPO.
Analyst Anthony said that in view of Alibaba’s growth, he recommends buying Yahoo shares.
“We continue to recommend aggressive purchase of the shares ahead of the Alibaba IPO. We expect an IPO filing in a few weeks,” he said.
Yahoo has been sputtering as it tries to refocus after losing its position as the Web’s leading search engine to Google.
According to the research firm eMarketer, Yahoo’s share of worldwide digital ad revenues declined to 2.9 percent in 2013, down from 3.4 percent in 2012, while Facebook and Google boosted their positions.
Yahoo’s share will decrease further in 2014, eMarketer estimates.
Yahoo’s share of US digital ad revenues dropped to 5.8 percent in 2013 from 6.8 percent in 2012, according to the research firm.
