This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

[video] Marissa Mayer Gets Another $1 Billion to Play With

NEW YORK (TheStreet) -- Yahoo! (YHOO - Get Report) raised another $1 billion, this time in a convertible debt offering, giving CEO Marissa Mayer plenty of additional ammo to play with. What Mayer plans to spend it on is less clear. Judging from her string of recent acquisitions, she probably has something in mind.

The convertible debt offering, due in 2018, will be used for "general corporate purposes, including, but not limited to, acquisitions or other strategic transactions, additional repurchases of common stock and working capital." In addition to that,Yahoo! announced a $5 billion buyback, as it continues to reward shareholders, largely due to the pending initial public offering of Alibaba, which Yahoo! owns a 24% stake in.

 



However, with Yahoo! raising additional money, it means Mayer isn't done shopping, though I don't expect another Tumblr-sized acquisition. In fact, she'll likely continue to do more acqui-hires, like Summly, Jybe, Stamped, Snip.it, OnTheAir, and others. These are not done just with boosting revenue in mind, but adding to its mobile team.

I don't expect Yahoo! to go out and acquire companies like Snapchat, even though it would be the ultimate play in mobile, with more than 350 million users.  It's too expensive for Mayer at this point, despite the company earning no real revenue.  If I had to guess on a more well-known company that could potentially come under Mayer's wings, it would most likely be Foursquare.

There's been questions about how Foursquare, run by Dennis Crowley can generate revenue, but the company recently raised $41 million in financing, so investors must see something in the location-sharing app.  

Everything Mayer has done since she took over the top spot at Yahoo! in the summer of 2012, has been done with mobile in mind.  On stage at the Dreamforce conference yesterday, Mayer noted that Yahoo! has 400 million mobile users, with about 400 engineers working on mobile products.  That number is up from Sept., when she said the company had 350 million mobile users.

Since that time, Yahoo! has updated Yahoo! Finance, particularly for mobile, and Yahoo! Screen has continued to evolve, with mobile in mind.  Yesterday, Apple added Yahoo! Screen to its set-top box.

With all that in mind, the company isn't going to be turned around over night, or even with one big acquisition, save for another Tumblr-like deal.  Mayer has said in the past she thinks it'll take around three years to turn the company around, and really get revenue going in the right direction.

Mayer has built up enormous amounts of goodwill on Wall Street, and has turned the perception of the company around, not just with investors, but the tech community as well.  On Yahoo!'s last earnings call, Mayer said the company received more than 17,000 resumes in a single week. "This is up from 12,000 in August, 10,000 in May and 2,000 in January, a more than 8x increase year-to-date," Mayer said on the call.

Though she's turned the perception of the company around, Mayer hasn't been able to get the core function of Yahoo! turning in the right direction from a revenue perspective. Page views have started to turn around, with Mayer having said before that page views ultimately equals revenue. 

With another $1 billion or so (underwriters have the option to purchase an additional $150 million in notes, though $200 million of the offering may be used to buy back stock from the purchasers of the notes) to play with, it'll be interesting which mobile-focused company Mayer acquires next. You know that money isn't just sitting around for a rainy day :)

--Written by Chris Ciaccia in New York

>Contact by Email.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
YHOO $44.95 -0.33%
AAPL $126.37 2.53%
FB $83.20 -0.13%
GOOG $552.03 0.67%
TSLA $190.57 3.01%

Markets

DOW 17,976.31 +263.65 1.49%
S&P 500 2,086.24 +25.22 1.22%
NASDAQ 4,947.4410 +56.2220 1.15%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs