With the search business sorted out through the Microsoft (MSFT) deal, Yahoo Inc. (YHOO) is beginning to focus on other areas. The company announced two new initiatives to boost revenue.
The first is the expansion of its sales force in Southeast Asia. Internet usage in the region has been growing rapidly over the last few years, driving increasing interest in online advertising. Online advertising industries in Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam are expected to grow around 60% between 2008 and 2010.
The newly appointed direct sales team will join forces with the existing Singapore-based team to develop localized marketing campaigns in Malaysia, the Philippines and Vietnam. The idea is to sell online advertising in form of display, search or through a mobile platform. We think this is a pertinent move and it is time Yahoo started cementing relationships in the region.
The second initiative is designed to attract U.S. customers who have been hit hard by the recession. It is a new website called Yahoo Deals (http://deals.yahoo.com) that provides a host of information about bargain agreements. It also offers coupons for groceries, local stores and online printable form for a large number of products, such as clothing, beauty, baby, computers, video games, flowers, gifts, automotive products, electronics and gardening.
A separate tab called Weekly Ads directs users to special offers by big local brands. The website also enumerates special offers for Visa card holders at local restaurants, retailers and service providers. Customers who wish to purchase coupons and take a print out later can save the coupons to their own account. Yahoo recently conducted a survey that proved the growing demand for coupons and limited availability. We believe this website is likely to attract many customers in the current market environment.
New CEO Carol Bartz seems to know what she wants. Despite weak results for some time now, Yahoo had been clinging on to all business lines. Bartz was quick to generate cash from the search business and is now giving the company the much-needed direction. We think the above measures will strengthen Yahoo’s revenue opportunities and provide the company with tools to generate cash in a weak environment.
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