Internet giant Yahoo! Inc. (YHOO - Analyst Report) recently announced the acquisition of Bignoggins Productions, a mobile app developer. Financial details of the deal were not disclosed.
San Jose, CA-based Bignoggins Productions was founded by Jerry Shen in 2010. It develops mobile apps for players in fantasy sports leagues. It is the maker of popular apps such as Fantasy Monster and Draft Monster. After the closure of the deal, Jerry Shen will join Yahoo's mobile engineering team at its California headquarters.
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, PlayerScale, agaming infrastructure company, photo app maker GhostBird Software and enterprise conference call service provider, Rondee.
Yahoo’s attempts to strengthen its mobile offerings and recreate its pages have led to a 70% increase in mobile email usage and a 50% increase in Flickr photo uploads from mobile platforms. While Yahoo remains in close ties with Apple, it may be expected to expand to Android and Windows in the not-too-distant future.
We are positive about Yahoo, as its search business continues to show signs of improvement, even in the face of tough competition from Facebook (FB - Analyst Report), Google (GOOG) and Microsoft (MSFT - Analyst Report). 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 #1 (Strong Buy).