Internet giant Yahoo! Inc. (YHOO - Analyst Report) recently announced its plans to expand in La Vista, Nebraska. Through this initiative, Yahoo plans to create 100 new jobs across customer care, integration and logistics.
Yahoo is trying to build a highly efficient customer care team. Of the 100 new jobs, 75 will be dedicated to customer service and the rest will work in areas such as logistics at Yahoo’s factory where servers are assembled and shipped to other locations. Other than La Vista, Yahoo’s other customer care centers are located in Lockport, NY and Quincy, WA. Currently, Yahoo employs 350 people in Nebraska.
The expansion forms a part of a strategy where Yahoo is bringing back outsourced jobs to the U.S. This might work in Yahoo’s favor as the current administration is trying to stop outsourcing to countries such as India, Indonesia and Taiwan, among others. It is possible that Yahoo might get the benefit of tax breaks or tax holidays to bring back jobs to the U.S.
We are positive about Yahoo, as its search business continues to show signs of improvement, even in the face of tough competition from Google and Microsoft (MSFT - Analyst Report). We are also encouraged by the refocusing initiatives of the company, as well as the many product upgrades and growth initiatives, which are improving engagement on Yahoo properties.
In the third quarter of fiscal 2012, Yahoo generated revenues of $1.20 billion, which were down 1.3% sequentially and 1.2% year over year. Traffic acquisition cost (TAC) was down 17.7% sequentially and 22.2% from last year. Excluding these costs in all periods, net revenue was essentially flat on a sequential basis and up 1.6% from last year, in line with the consensus estimate.
Yahoo has a Zacks Rank #1 (Strong Buy). Other technology stocks that are worth considering include Linear Technology Corp. (LLTC - Analyst Report), ON Semiconductor Corp. and Intersil Corp. (ISIL - Snapshot Report), all carrying a Zacks Rank #2 (Buy).