Yahoo! Inc. (NASDAQ:YHOO) disappointed investors earlier this week when it released a less than stellar earnings report for the second quarter of 2013. The company went out shopping the day after it delivered its earnings report and came back with AdMovate. Now it appears the company's spending spree is far from over.
The company announced today that it had completed the purchase of a Beijing based start up that analyzes data from social networks. The company, which is called Ztelic, comes in at number nineteen in the list of acquisitions Yahoo! Inc. (NASDAQ:YHOO) has made under Marissa Mayer. Though investors seem to be fans of the confident, targeted way the company seems to be going about its purchases, there sure are a lot of them.
Yahoo spending spree—too much too soon?
This is the nineteenth acquisition that Yahoo! Inc. (NASDAQ:YHOO) has made under Marissa Mayer. Apart from Tumblr founder David Karp appearing in the media every so often to talk up his site, Yahoo has not done anything public with the acquisitions. With the firm going in so many directions and so many new businesses under its wing, can Yahoo! Inc. (NASDAQ:YHOO) meet the pressure?
Investors think so. Yahoo stock is up 15% in the last five days despite missing revenue estimates in its earnings report. Mayer is, in the market's eyes at least, able to bend the company to her will. It's still unclear what that will is, however.
Where is this leading Yahoo?
Yahoo! Inc. (NASDAQ:YHOO) is two completely different companies right now. The first is the old Yahoo, the one that runs its "web portal" and its other archaic web services, like "e-mail." These businesses are dying but they happen to be where pretty much all of Yahoo's money comes from.
This is the business that Marissa Mayer is trying to lengthen the dying breath of. It has nothing to do with the company's acquisitions, apart from the fact that they're apparently funding them. The acquisitions, and the money, are supposedly being transferred to the new Yahoo. Too bad nobody seems sure what that is.
The new Yahoo is going to be social and dynamic. It's going to be connected and Web 2.0. It's going to involve rich media, and Tumblr. Nobody has any idea what Yahoo! Inc. (NASDAQ:YHOO) is really doing, but there sure are a lot of buzzwords. Yahoo is changing, and investors are confident that Marissa Mayer and a flood of acquisitions can save the company.