The Yahoo! Japan (TYO:4689) Earning Expectation

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By Erik Waters on October 30, 2014 Company

On October 29, Yahoo! Japan (TYO:4689) submitted its second quarter results. It seems as if, the company is focused on shifting its prime businesses on to the mobile platform, as mobile users population is growing day by day. In its first quarter, the company reported a 2.8% growth over last year’s revenues, which gives a promising figure of $970 million. This year, even though the growth has been a bit slow in the online shopping division, it seems like smartphones and tablets are bringing rapid growth into the business in mobile ad division, display ads, search and ads listing division. In the coming months, Yahoo! Japan (TYO:4689) will be focused on its online shopping and auction division.

Mobile advertising contributes to 20% of Yahoo! Japan (TYO:4689)’s total value, and with smartphone users at a rise with an estimated 50% growth in the number of users, these figures are likely to increase even further. It’s expected that, by 2020, revenues from mobile users will reach 25%, and budget planning will be done around mobile user preferences and shifts.

In its first quarter, Yahoo! Japan (TYO:4689) witnessed an increase to 36 million visitor count, along with an increase of Y18.1 billion in revenues generated through mobile users. Similar trends and patterns are expected in the second quarter results. The RPM is expected to go up from $2.11 to $3.55.

Other major contributions come from online shopping division, which is expected to deliver 15% of the total value, a slow growth worth $690 million. But competition in the Japanese market is fierce, and Yahoo! Japan (TYO:4689) needs to keep up to stay in the game against Amazon Inc. (NASDAQ:AMZN) and Rakuten Inc. (OTC:RKUNF). To gain a competitive edge over these companies, Yahoo! Japan (TYO:4689) has to merge with strong corporations and third party vendors. The company made numerous efforts on its part to stimulate growth, which included removal of listing and tenant fee for the website, an increase in Yahoo! Japan (TYO:4689) property listing, which will increase its value. The second quarter release will also help determine how well the company has done in its property division. According to speculations, the shopping division will grow to $3.71 billion, and auction division will rise to $7.23 billion.

In the last quarter, one of the favorable key elements was Yahoo! Japan (TYO:4689)’s partnership with a host of developers. The company was posting their contents on its page. Hence, it wouldn’t come as a surprise if the company offered even more partnerships in the future. These partnerships also help to attract viewers to the page and keep them engaged. This may also work well in favor of the partnered companies, as Yahoo! Japan (TYO:4689) has a strong position in the Japanese market. Currently, the page views are expected to stay constant at 1,030 views per month, but eventually it is expected to bring in more users in the long run. As Yahoo! Japan (TYO:4689) is a market leader in Japan, many expectations are tied to it.