Yahoo earnings top expectations
Challenges for search company remain as share of ads falls
SAN FRANCIS CO Wall Street got a first glimpse of Yahoo’s reboot under new CEO Marissa Mayer, as she presided over the company’s earnings release for the first time.
After the stock market closed Monday, Yahoo reported an adjusted third-quarter profit of 35 cents a share on revenue of $1.09 billion. That beat forecasts for a profit of 25 cents a share on revenue of $1.8 billion, according to the survey of estimates from Thomson Reuters.
Including the sale of Alibaba, Yahoo reported third-quarter profit of $3.2 billion, or $2.64 a share. In the same period a year ago, Yahoo reported profit of $298.3 million, or 23 cents a share.
“This job is tailor-made for me,” Mayer said on the conference call with analysts. “I came to Yahoo to grow and redefine” the company.
Investors cheered the financial news and the CEO’s remarks, pushing shares up 4.6% in after-hours trading. The former Google executive called for improvements to Yahoo Web destinations, search, social efforts and mobile, in a bid to wring more advertising dollars. “The mobile wave is a huge wave for us to ride,” she said.
But Yahoo has seen its share of the display advertising market give way to rivals Google and Facebook. In 2008, Yahoo held 18.4% of the display ad market, a position expected to decline to 9.3% this year, according to eMarketer.
“Google and Facebook are growing fastest, and Yahoo is missing out in real-time bidding sales, and they also have additional costs with a huge sales staff,” says Karsten Weide, an analyst at technology research firm IDC.
Former longtime Google executive Mayer took the reins at Yahoo in July, becoming the fifth CEO in five years. Since taking the role, she has brought in a new cast of executives.
A sting to Google, this month she hired away Henrique de Castro, one of Google’s top ad executives, who will serve as chief operating officer at Yahoo starting by January or sooner.
In August, she hired Kathy Savitt, a former American Eagle Outfitters marketing chief, to take the role of chief marketing officer at Yahoo.
In September, Mayer brought in Jacqueline Reses, a former executive at Apax Partners, as the company’s human resources and recruitment chief.
Also in September, Mayer brought in new CFO Ken Goldman, former CFO at Fortinet.
“Companies are all about people, and the companies with the best talent win,” Mayer said.