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Yahoo's Earnings Prospects Fail To Excite Analysts In Q1

Yahoo's Earnings Prospects Fail To Excite Analysts In Q1
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Yahoo! Inc. (NASDAQ: YHOO) will report its first quarter 2015 earnings results after the market close Tuesday, but analysts aren't very excited by the company's prospects.

"Wake me up when Yahoo actually grows revenue a little bit," Cody Willard, chairman of Scutify (a financial social network), told Benzinga. "This is like AOL in 2004."

Tech industry expert and analyst Jeff Kagan said that while Yahoo is trying to build the business, "it's just not a big brand name company that's in the news." A turnaround has been anticipated for some time, but Kagan said it hasn't happened yet.

"There's nothing new and different with Yahoo," Kagan told Benzinga. "As a company providing services, there's just not a lot that's exciting."

Related Link: Is Yahoo's Firefox Deal A 'Big Loss' For Google?

'A Necessity'

B. Riley & Co. analyst Sameet Sinha told Benzinga that he expects Yahoo to focus on mobile and social revenue this quarter, as well as the company's newly signed deal with Microsoft Corporation (NASDAQ: MSFT).

"I think Yahoo made the right choice," said Sinha. "It gives them more flexibility to improve monetization."

Kagan thinks that Yahoo and Microsoft need each other.

"It's a necessity," said Kagan. "Neither company is on a growth track. They're not like Google. They're not growing and blowing up. They basically, while they may be financially strong and financially growing, there's nothing hot about them."

Willard said there was no way for Yahoo or Microsoft to end the partnership.

"Yahoo doesn't have the technology to search anymore and Microsoft needs the traffic," said Willard. "That was a meaningless but no-brainer [deal] for both of 'em."

Outdated Technology

Willard is also displeased with Yahoo's outdated Messenger app.

"The Yahoo Messenger app alone, which is supposed to be a competitor to my Futr app, they haven't updated the thing in one year and the reviews are all one star!" he said. Yahoo's last update was nearly 12 months ago. The current review average is 1.5 stars, and the three featured reviews said the app is "horrendous." One reviewer said there should be a zero stars option "for train wrecks like this."

Futr, a new app from the creators of Scutify, allows users to schedule their messages in advance. Apple Inc. (NASDAQ: AAPL) hasn't received enough customer ratings to provide a review score average for Futr, but all three featured reviews gave it five stars.

"Marissa Mayer is supposed to be Ms. Hands-On, Detail-Oriented CEO, and she's out there designing the exclamation point on Yahoo's logo when the apps don't even work!" Willard concluded. "I get mad when I think about the opportunity that Yahoo is squandering."

Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.

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