Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

Internet giant Yahoo! Inc. (YHOO - Analyst Report) recently announced its acquisition of photo app maker GhostBird Software. Financial details were not disclosed.

Toronto, Ontario-based GhostBird Software was founded in 2008 by former Electronic Arts Inc. (EA - Analyst Report) employees, Travis Houlette and Ye Lu. GhostBird Software is the creator of the photo-editing apps, KitCam, PhotoForge and PhotoForge2 for Apple’s (AAPL - Analyst Report) iPhone.

The KitCam app facilitates photo capturing through the adjustment of different lenses and filters in the mobile setting. It also allows manual selection of balance and exposure. The other app, PhotoForge allows users to modify the pictures taken through image resizing, cropping and metadata editing among others.

After the acquisition, apps from GhostBird will not support new versions of Apple’s iOS. However, users who have already purchased the apps will able to re-download them from iCloud.

Yahoo’s acquisition makes sense, as the Internet giant will use the apps to enhance Flickr, an image and video hosting and photo-sharing website. Yahoo acquired it in 2005 and redesigned it in May 2013. Flickr was losing favor among users due to other sites such as Facebook (FB - Analyst Report), Twitter and YouTube where users uploaded and shared images and videos.

The GhostBird acquisition follows that of blogging and social networking site, Tumblr, for $1.1 billion. After CEO Merissa Meyer took over the reins of the company, it has been quite active on the acquisition front. Some of its recent acquisitions include Astrid, a task-management app maker;Summly, a news-condenser app maker; Stamped, a mobile-review app maker; OnTheAir, which specializes in broadcasting video chats or interviews to online audiences; Snip.it, which is a kind of clipping service for the web; Propeld, a location-based apps maker; Jybe, a social recommendation site, Loki Studios, a mobile gaming start-up and PlayerScale, agaming infrastructure company.  

We believe that these acquisitions are a part of its strategy to boost its offerings in mobile devices, video, and personalized digital content. Currently, Yahoo has a huge task at hand, which is to bring back its users and make them spend more time on its properties. If successful, Yahoo may reclaim some of its lost market share going forward. This would be crucial in bringing back advertisers as well. 

In the first quarter of fiscal 2013, Yahoo generated revenues of $1.14 billion, which were down 15.3% sequentially and 6.6% year over year. Traffic acquisition cost (TAC) was down 42.3% sequentially and 49.9% year over year. Excluding these costs in all periods, net revenue was down 12.5% on a sequential basis and 0.8% from last year, short of the consensus estimate.

Yahoo has a Zacks Rank #2 (Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GRP IN DXYN 15.84 +7.90%
BOFI HLDG IN BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%