Yahoo! (YHOO) Acquires Mobile Marketer Sparq

NEW YORK (TheStreet) -- Yahoo! (YHOO) announced that it has acquired mobile marketing startup Sparq for an undisclosed sum.

Shares of Yahoo fell 1.2% to $39.52 on Tuesday.

Sparq will terminate its current mobile marketing platform as its team moves to the Sunnyvale campus of Yahoo!. According to TechCrunch, the startup raised a total of $1.7 million in several small rounds of funding prior to the acquisition. The most recent round raised $650,000 last year. There is no word on how much Yahoo! paid for the startup.

Yahoo! will likely use the startup's expertise to help monetize its mobile apps and platforms. The Internet company has recently launched a number of new apps for Apple's  (AAPL) iOS and Google's (GOOG) Android, but needs a way to make money from those apps.

TheStreet Ratings team rates Yahoo! as a "buy" with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate YAHOO INC (YHOO) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, reasonable valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Compared to its closing price of one year ago, YHOO's share price has jumped by 100.99%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, YHOO should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The gross profit margin for YAHOO INC is currently very high, coming in at 83.56%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 26.04% is above that of the industry average.
  • YHOO, with its decline in revenue, underperformed when compared the industry average of 9.1%. Since the same quarter one year prior, revenues slightly dropped by 5.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • YAHOO INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, YAHOO INC increased its bottom line by earning $3.28 versus $0.82 in the prior year. For the next year, the market is expecting a contraction of 55.3% in earnings ($1.47 versus $3.28).
  • You can view the full analysis from the report here: YHOO Ratings Report

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