Key Takeaways From Yahoo! Analyst Day (YHOO)

Yahoo! Inc. (NASDAQ: YHOO) had its analyst day on Wednesday and the comments started coming out late yesterday.  This was the first real show and tell session it has had with Wall Street in roughly three years.  We wanted to highlight what we saw as the top takeaway issues from Yahoo!’s analyst day presentations.  These are not in any particular order, and some may overlap with news that was out yesterday during the trading hours.

CFO Tim Morse aims to boost operating margins to range of 15% to 20% by 2012, up from about 6% on a nominal basis this year.  Carol Bartz called this the period of “a journey back to respect” as 2009 margins are unacceptable.  She also noted the importance of being profitable if there has been no revenue growth.  The company is also targeting a return on invested capital of 15% to 20% from 2010 to 2012.

It and Microsoft Corp. (NASDAQ: MSFT) extended the negotiation period on the famed internet search pact.  This was explained in more detail, although we’d note that early-2010 looks more like the target date.  From 2011 to 2012 the revenue sharing model will roll out in each region in the search pact, but revenue sharing will not be seen in 2010.

Carol Bartz also wants to hammer home that Yahoo! is to be thought of as an internet technology and content company rather than a mere search and ad-display company. Yet winning at display was noted as well.

Yahoo! estimates that there will be 2 billion global web users in 2012, and 50% of the new users internationally will come from emerging markets over the next 3 years.  75% of Yahoo! users are international, but account for only 27% of revenue today.

There are of course other takeaways, but these were the highlights that we collected from presentations throughout the day and consider the key takeaways the morning after.  So far there have been very few analyst changes worth noting, which some may take as odd as it was an ‘analyst day’ presentation.

Shares had been down worse than this pre-market and last night at certain points, but Yahoo! shares are down 0.55% at $15.95 this morning after a 3.8% drop yesterday.

JON C. OGG