These days it is all about finding the niche in the market and cashing that idea and this will be the biggest challenge for Yahoo’s new invention. The real value these days is in the phone arena and Yahoo certainly understands the importance of this. Watts app shows a clear example of this. Although yahoo live txt will face much tougher competition with the like of FB messenger and Snap Chat, which pretty much are providing very similar service.
In terms of earning growth, we are not a big fan of the stock as there isn’t much firepower left and most of the stock move was on the back of Alibaba. Yahoo really need a new product which can become the engine for its growth and we do not think that this Live txt is one of them. It could certainly help the firm, but far off from being a game changer.