Yahoo ad revenues shrink, profit grows on Alibaba stake

Nieuws Breedband Wereld 17 JUL 2013
Yahoo ad revenues shrink, profit grows on Alibaba stake

Yahoo reported growth in net profit thanks to its 24 percent stake in e-commerce portal Alibaba, but lower revenues in the second quarter, as it struggled to increase advertising turnover. Overall revenue shrank by 7 percent to USD 1.14 billion from USD 1.22 billion in the second quarter of 2012. Income from operations soared 150 percent to USD 137 million from USD 55 million, and net earnings per diluted share were 68 percent higher at USD 0.30 in the latest quarter, after significant share buybacks, compared to USD 0.18 a year earlier.

CEO Marissa Mayer said she was encouraged by Yahoo’s second quarter performance, citing continued stability and a record number of product launches such as Yahoo News, Yahoo Sports app, search redesign, Flickr, Mail for tablet and the Weather app. She expects Yahoo to return to revenue growth around the fourth quarter. The company has also brought much talent on board through its acquisition of nine startups over the second quarter, namely Summly, Astrid, Milewise, Loki Studios, Go Poll Go, PlayerScale, Rondee, Ghostbird Software and youth-oriented social network Tumblr. Yahoo expects the addition of Tumblr to grow the group’s audience to over 1 billion visitors a month.

Display advertsing revenue decreased by 12 percent to USD 472 million in the second quarter, with the number of ads sold, excluding Korea, down by around 2 percent and the price per ad down by 12 percent. In search advertising, excluding Korea, revenue dropped by 9 percent to USD 418 million and the price per ad fell by about 12 percent. Paid clicks rose by 21 percent but the price per click declined by 8 percent.

Yahoo spent USD 1 billion of cash on acquisitions in the quarter, including USD 970 million for Tumblr alone, which was offset b 846 million in cash from Chinese portal Alibaba to redeem group preference shares, comprising USD 800 million of redemption value and USD 46 million of dividends.

Yahoo expects to report USD 1.06 billion to USD 1.1 billion of revenue excluding traffic acquisition costs in the current quarter and USD 4.45 billion to USD 4.55 billion in the full year, USD 50 million lower than its previous guidance. Adjusted EBITDA is projected to be USD 330 million to USD 350 million, respectively, and non-GAAP operating income USD 165 million to USD 185 million and USD 900 million to USD 1 billion.

Categories:

Internet

Companies:

Flickr,  Yahoo,  Astrid,  Redeem,  Audience

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Wereld

Tags:

Messaging, Financial figures, Portals / social media, Wireline, Wireless, Consumer, Enterprise, Advertising services

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