YHOO Could Suffer From Possible Comparisons In Display With GOOG
Analysts at Benchmark downgrade Yahoo! Inc (NASDAQ: YHOO) from "buy" to "hold." The target price for YHOO is set to $18.
According to Benchmark, “Yahoo has consistently lost domestic search share, down about 4 percentage points y/y to 16.8% in February. While we expect share losses to moderate, we fear further secular challenges as scale and momentum increasingly reside with Bing. In addition, Google is likely to increase its position as searches migrate to mobile due to its specialization and initial success with Android (now 7% of smartphones).”
Benchmark stated that YHOO had “benefited from its display reach in the initial stage of the cyclical rebound and we project owned and operated display to increase 20% y/y in 1H10.” “But fragmentation could hinder long-term growth as specialized sites like Facebook build share. Initiatives like AOL’s Patch present new competition while Google is beginning to gain steam in display. Yahoo’s stock has suffered due to comparisons with Google’s search. This comparison could be revisited in display,” the analysts say.
