Yahoo Earnings Preview: Gains Expected, Acquisitions Anticipated

Yahoo! (NASDAQ: YHOO) is expected to post a much-needed gain when it reports its third-quarter earnings after the market close on Monday.Current estimates suggest that Yahoo will post earnings of 26 cents per share on revenue of $1.08 billion. This is a modest increase over the company's 3Q 2011 results, but it might not be enough to silence critics of the firm's new CEO Marissa Mayer.Mayer has received a tremendous amount of criticism ever since she announced that she was leaving her former employer, Google (NASDAQ: GOOG), to take control of Yahoo. Some analysts believed that Ross Levinsohn, who served as the firm's interim CEO after Scott Thompson stepped down, would become the company's new chief executive. Others expected Yahoo to appoint someone else from within the firm. The company stunned the world when it announced that it had hired an outsider.When Thompson joined Yahoo, one analyst argued that he could raise the company's value to $100 per share. But after enduring a fierce resume scandal (in which he was found to have lied about having a computer science degree) and a battle with cancer, Thompson left his post as CEO.In the months that followed, Levinsohn was faced with a company that had gotten itself into a handful of legal issues. Under the guidance of other chief executives, Yahoo announced a plethora of layoffs. These are not issues that Levinsohn was given the time to remedy.Now it is Mayer's turn to take charge and lead the company to profitability. In September, she was expected to detail her plans for Yahoo's future, but little came from that report. Mayer is believed to make a more significant announcement Monday afternoon.Without any indication of what Mayer might have planned, many are speculating that the company will announce a number of acquisitions. Over the past several months, Yahoo has worked hard to form a number of key partnerships with major corporations, including subsidiaries of Comcast (NASDAQ: CMCSA) and Disney (NYSE: DIS). Yahoo also announced a partnership with Spotify that would allow the two firms to cross-promote their respective services.Instead of forming additional partnerships, Yahoo is expected to acquire OpenTable (NASDAQ: OPEN), Millennial Media (NYSE: MM), PubMatic and/or Caterva. As the leading restaurant reservations website, OpenTable is thought to be a very attractive company to Yahoo, which may also be interested in the site's 15 million reviews.Follow me @LouisBedigianBZ