SAN FRANCISCO -- What would happen to Yahoo if its golden goose stopped laying golden eggs?
Investors were not just disappointed in Yahoo's fourth-quarter results Tuesday. They were also disappointed in the growth of Chinese e-commerce giant Alibaba, in which Yahoo has a 24% stake.
That stake has helped Yahoo's share price double in the last year -- even as its online advertising business has continued to decline -- because Alibaba is preparing for a blockbuster initial public offering this year.
But Yahoo reported Tuesday that Alibaba's revenue was $1.78 billion in the fourth quarter. That's a 51% increase from a year earlier. But it pales in comparison to the 61% year-over-year revenue growth in the third quarter and 71% in the second quarter.
"While still very impressive, the trend shows deceleration," said Cantor Fitzgerald analyst Youssef Squali.