Follow Us

We use cookies to provide you with a better experience. If you continue to use this site, we'll assume you're happy with this. Alternatively, click here to find out how to manage these cookies

hide cookie message

Yahoo revenue drops as ad business flounders

The company has to work faster to make up for the drop, CEO Marissa Mayer says

Article comments

Yahoo reported falling sales and mixed results in its crucial advertising business on Tuesday, signaling further challenges ahead in CEO Marissa Mayer's efforts to turn around the aging company.

Total sales for the second quarter ended June 30 were US$1.08 billion, down 4 percent from the $1.14 billion reported during the same quarter last year, Yahoo said.

Excluding traffic acquisition costs, revenue was $1.04 billion, down 3 percent from the 2013 quarter and below the consensus forecast of $1.08 billion from analysts polled by the Thomson Financial Network.

Yahoo's profit was $270 million, a 19 percent drop from the $331 million reported a year earlier. Net earnings per diluted share were $0.26, down 15 percent.

On a non-GAAP basis, which excludes certain expenses, earnings per share were $0.37, slightly below analysts' expectations of $0.38.

In after-hours trading on Tuesday, shares were trading at $35.60, down from a high of $35.95 on Monday.

"Our top priority is revenue growth and by that measure, we are not satisfied with our Q2 results," Mayer said in a press release. "While several areas showed growth, their growth was offset by declines," she said.

Search advertising revenue, which rose by 2 percent to $428 million, lent a little shine to an otherwise lackluster set of results.

But there weren't many other bright spots. Display ad revenue dropped by 8 percent to $436 million, "highlighting the fact that we need to work faster to ameliorate the negative trends," Mayer said.

And while the number of display ads sold rose by 24 percent compared with a year earlier, the price per ad fell by the same percentage.

The quarterly results were announced around the two-year anniversary of Mayer's appointment as CEO. Since 2012, she has tried to turn Yahoo around, partly by redesigning legacy products, making bets in digital video and acquiring startups for engineering talent.

Still, she has yet to produce strong growth in Yahoo's core advertising business to help the company better compete against Google and Facebook.

Alibaba, the Chinese e-commerce giant, has helped to bolster Yahoo's stock by virtue of Yahoo's 24 percent stake in the company. Alibaba is expected to go public soon, and when it does Yahoo will be required to sell some of its shares, which should bring in a lot of cash.

But on Tuesday, Yahoo said it had entered into a share repurchase agreement with Alibaba that reduces the number of shares it has to unload at the time of the IPO. Instead of 208 million shares, it will only have to sell 140 million. That could mean less of a windfall for shareholders.

Zach Miners covers social networking, search and general technology news for IDG News Service. Follow Zach on Twitter at @zachminers. Zach's e-mail address is zach_miners@idg.com



Share:

More from Techworld

More relevant IT news

Comments



Send to a friend

Email this article to a friend or colleague:

PLEASE NOTE: Your name is used only to let the recipient know who sent the story, and in case of transmission error. Both your name and the recipient's name and address will not be used for any other purpose.

Techworld White Papers

Choose – and Choose Wisely – the Right MSP for Your SMB

End users need a technology partner that provides transparency, enables productivity, delivers...

Download Whitepaper

10 Effective Habits of Indispensable IT Departments

It’s no secret that responsibilities are growing while budgets continue to shrink. Download this...

Download Whitepaper

Gartner Magic Quadrant for Enterprise Information Archiving

Enterprise information archiving is contributing to organisational needs for e-discovery and...

Download Whitepaper

Advancing the state of virtualised backups

Dell Software’s vRanger is a veteran of the virtualisation specific backup market. It was the...

Download Whitepaper

Techworld UK - Technology - Business

Innovation, productivity, agility and profit

Watch this on demand webinar which explores IT innovation, managed print services and business agility.

Techworld Mobile Site

Access Techworld's content on the move

Get the latest news, product reviews and downloads on your mobile device with Techworld's mobile site.

Find out more...

From Wow to How : Making mobile and cloud work for you

On demand Biztech Briefing - Learn how to effectively deliver mobile work styles and cloud services together.

Watch now...

Site Map

* *