Yahoo Rises After Upgrade

Published on Friday, 11 December 2009 16:07 Written by Danny Miller

New York, Dec 11^th (TradersHuddle.com) - Yahoo! Inc. (NASDAQ:YHOO) rose 1.74% to $15.76. As the second-largest U.S. search engine was raised to “buy” from “hold” at Kaufman Brothers with a 12-month share price estimate of $20.

Analyst Aaron Kessler check with advertisers and industry sources and said that Yahoo should see improvement in display demand and pricing in the fourth quarter. He predicts that display ad sales may not fall 9% from year-ago levels, as he originally estimated.

With the search ad market dominated by Google (NASDAQ:GOOG), Yahoo needs display ads to perform well in order to meet its revenue goals.

Yahoo (NASDAQ:YHOO) has a pending deal with Microsoft (NASDAQ:MSFT) to use the Bing engine. Analysts expect the partnership to be approved early next year. Not only will the outsourcing effort help reduce costs for Yahoo, but buzz surrounding the deal has effectively elevated Bing as a formidable competitor to Google.

A positive for Yahoo is that search traffic has surged thanks to the Tiger Woods scandal, so it was not surprising that Yahoo’s CEO said in her remarks “God Bless Tiger” at the UBS Global Media and Communications Conference, as the company has been able to put more display ads and search ads in the surging web traffic.