) Spanish entity Yahoo! en Español and
) Latin division have entered into a strategic partnership to
develop and distribute a series of entertainment programs. These
shows will be aired starting early 2013.
The stalwarts will jointly produce videos and digital music
programs exclusively for the U.S. Hispanic audience. Yahoo! en
Español and Sony Music Latin will develop programs related to
beauty, cooking, lifestyle, dance and music. These shows will be
exclusively broadcasted on the OMG! en Español and Mujer channels
across Yahoo! en Español.
Sony Music Latin features popular singers like Shakira, Ricky
Martin, Chayanne, Marc Anthony, Pitbull among others, which is a
positive for Yahoo.
Currently, Latin music is ruling the charts alongside American
Pop music. Latin singers are growing in popularity, helped no
doubt by the growth in the U.S. Hispanic population. Moreover, it
is expected that the U.S. Hispanic market's buying power may
touch $1.5 trillion by 2015 (Nielsen). Companies such as
Procter & Gamble
) are all targeting the Latin segment for future growth
According to research by PWC, the music industry is poised to
grow at a CAGR of 5.4% to $21.5 billion by 2016 in the U.S.
alone. Therefore, Yahoo's decision to tap the potential in this
market makes perfect sense.
As per Global Industry Analysts, Inc. or GIA, the worldwide
online advertising market may reach $72.8 billion by the end of
2015. Growth will be fuelled by rapid increase in the Internet
user base in emerging countries.
Yahoo is seeing stiff competition from the
) search platforms and the company is increasingly getting
squeezed out of the search market. Therefore, such strategic
partnerships are a big positive and the resultant increase in
revenues may help to make up for the losses in search.
Further, Yahoo! en Español is creating a niche market in
digital branded entertainment. In 2012, it launched 30 programs
and is now providing opportunities to advertisers that can target
multi-cultural audiences on a single platform.
In the third quarter of fiscal 2012, Yahoo reported revenue of
$1.20 billion, which was down 1.3% sequentially and 1.2% year
over year. TAC costs were 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) and Sony carries a
Zacks Rank #3 (Hold).
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