Yahoo\\\'s long goodbye with Alibaba takes heat off Mayer
Thursday, 17 July 2014
SAN FRANCISCO, July 16 (Reuters) : Yahoo Inc cannot seem to part ways with Alibaba. And with Yahoo's business continuing to deteriorate, some Wall Street analysts say it is hard to blame the company.
Yahoo said on Tuesday that it would keep a bigger-than-expected chunk of its stake in Alibaba when the Chinese e-commerce company goes public later this year.
That could give Chief Executive Officer Marissa Mayer, who celebrated her two-year anniversary at Yahoo's helm this month, more time to achieve a turnaround that has proven elusive.
"It remains a very large fig leaf," Pivotal Research Group analyst Brian Wieser said of Yahoo's Alibaba stake, which he said "obscures" Yahoo's weak results. "A lot of investors will certainly view it very favorably that they're holding on to more" of Alibaba.
Yahoo missed Wall Street's targets on Tuesday after a 24 per cent plunge in online display advertising rates during the second quarter. Executives blamed difficulties selling premium ads to marketers as well as delays in rolling out a new advertising system. It expects to fix the problems over the next one or two quarters, but overall revenue growth remains well below rivals such as Google Inc and Facebook Inc.