) recently entered into a content sharing partnership with the
leading business news television channel CNBC. CNBC is a division
of NBCUniversal, of which a majority controlled by media giant
The partnership immediately makes CNBC the leading content
provider on the Yahoo! Finance page in the U.S. Yahoo! will also be
providing content to CNBC. The companies will also jointly develop
online videos to appear across both Yahoo! Finance and CNBC.com
The partnership is expected to benefit both companies over the
long term. The alliance will broaden the reach of both the
companies going forward. According to comScore, Yahoo! Finance had
approximately 37.5 million online users in May, making it the #1
online business news portal. However, during the same month, CNBC
had only 6.5 million unique visitors, which put it into the #11
We believe that the partnership will expand CNBC's web presence,
thereby boosting its competitive position over other online
business news sites such as Dow Jones, AOL, MSN, Forbes, Bloomberg
and CNN. CNBC's expanding television viewership (100 million in US
and 395 million worldwide) is expected to boost Yahoo!'s growth
story going forward.
We also note that CNBC has a strong presence in the emerging
markets of the Asia-Pacific, particularly China, where Yahoo! is
practically non-existent. Therefore, the partnership will further
expand Yahoo!'s presence in the Asia-Pacific and will help it to
bolster its position in China. Yahoo! already has a partnership
) in the region.
The increasing penetration of both the companies is expected to
drive advertising sales going forward. CNBC will lead the
advertisement sales for the new online shows, to be primarily
telecasted on its business news channel. Both the company's will
share the advertising sales revenue (sharing ratio was not
disclosed) going forward.
We believe that Yahoo! will continue to pursue this kind of
content sharing deal in order to boost its online user base going
forward. The company already has a number of content sharing deals
with other companies including
) ABC Television Group.
Yahoo has lost almost 65% of its value since its 2006 peak and
has been struggling to improve its financials and build shareholder
confidence. But the company has failed to turn around and is facing
management turmoil following the recent dismissal of its third CEO
in just three years.
The company is fighting the likes of
). However, despite its struggles in the recent past, partnerships
of this kind are likely to boost investor sentiment.
We have a Neutral recommendation on Yahoo! over the long term
(6-12 months). Currently, Yahoo! has a Zacks #2 Rank, which implies
a Buy rating in the short term (1-3 months).
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