) completed its exit from South Korea with the shut-down of its
web portal business in the region.
Internet giant Yahoo started its Korean venture way back in
1997. It is exiting after 15 years and firing 200 of its South
Korean employees in the process. South Korea is the first of the
Asian markets from where Yahoo is retreating.
Yahoo has been actively restructuring its operations over the
past year. It has already decided to shut down its music service
in China on January 20, 2013. Further, it has been disposing its
assets in China and selling part of its share in Alibaba for $7.6
billion with the intention of using the proceeds to acquire new
) also appears to be withdrawing from China going by the fact
that it has closed down both its shopping search and Music Search
services in country. The Taiwanese handset maker HTC is also
closing its business in South Korea as it is facing stiff
competition from local handset makers like Samsung and LG.
Yahoo started strongly in South Korea, but gradually lost
position to local South Korean players such as Daum
Communications Corp, NHN Corp and SK Communications Co. As a
result, its market share fell to a mere 2-3%, whereas NHN's Naver
(search engine) commanded 80%.
Thus, the strategy adopted by the new CEO Marissa Mayer makes
sense. Yahoo's resources can be put to good use now, i.e., to
invest in markets such as Singapore, Malaysia, Hong Kong and
Taiwan, where the Yahoo brand is better valued.
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 #2 Rank, which implies a Buy rating while
Google has a Zacks #3 Rank, implying a Hold rating in the near
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