Yahoo finally getting out of the woods

Yahoo may finally be pulling out of a three-year slump that cast aside two CEOs and spurred a cost-cutting spree that led to about 2,000 layoffs.

The purge helped Yahoo more than triple its third-quarter profit from last year to top analysts' relatively low expectations for the troubled internet company. The Sunnyvale-based company also got a $98 million (£59 million) lift from the sale of its stake in China's Alibaba.com.



But the results released yesterday also showed Yahoo's revenue fell by at least 12 per cent for the third consecutive quarter. The revenue rut means Yahoo still has a long way to go on its comeback trail.



Analysts, though, believe Yahoo should be able to boost its ad sales - the main source of its revenue - as long as the US economy continues to heal and marketers funnel more of their budgets to the web.



Carol Bartz, Yahoo's third chief executive since June 2007, indicated she believes the worst is over.



"We had a solid third quarter that signals our major businesses have stabilised," she said in a prepared statement.

Yahoo earned $186 million (£112 million), or 13 cents a share, in the July-September quarter, compared with $54 million (£32 million), or 4 cents a share, at the same time last year.



The average analyst estimate among analysts polled by Thomson Reuters was 7 cents per share.



Revenue for the period fell 12 per cent $1.58 billion (£953 million), barely an improvement from the first six months of the year when revenue dropped by 13 per cent.



Investors apparently were pleased with the modest progress. Yahoo shares gained 97 cents, or 5.7 per cent, to $17.55 in extended trading. In regular trading earlier, shares fell 5 cents to close at $17.17.



Bartz didn't participate in Yahoo's conference call with analysts because of an unspecified illness that was described as "nothing serious" by Tim Morse, the company's chief financial officer.



While Yahoo has been trying to regain its footing, Google has sprinted further ahead of its older rival. Last week, Google posted the highest profit in its 11-year history in the third quarter as its revenue climbed 7 per cent.



But Bartz has argued it's unfair to compare Yahoo with Google, even though the two companies run the internet's two largest search engines.



She contends Yahoo's website is more of an information and entertainment hub that happens to have a good search engine, too.



Google handles about two out of three search requests in the United States while Yahoo processes about one in every five of the queries. The disparity gives Google a huge advantage because a huge piece of internet advertising is tied to search requests.



Advertisers also are more likely to increase their spending on search ads because they are relatively inexpensive and typically only cost money when they are clicked on. And Google seems to show more ads that provoke consumer clicks.



"We know Google does a better job monetizing than we do, that's well chronicled," Morse acknowledged in yesterday's conference call.



Yahoo makes more of its money in display advertising - a niche consisting of online billboard and other more visual messages. Those marketing campaigns tend to require larger, long-term commitments that are unlikely to be made until advertisers see more evidence that the economy is strengthening.

Suggested Topics
News
Disruption at Waterloo after a person was hit by a train
newsCancellations and disrupted service after person hit by train
Arts and Entertainment
music
Arts and Entertainment
The almost deserted Liverpool Echo Arena on Monday
tvCan X Factor last in the face of plummeting numbers auditioning
News
Kirsty Bertarelli is launching a singing career with an album of songs detailing her observations of “real life”
news
Life and Style
ebookNow available in paperback
ebooks
ebookPart of The Independent’s new eBook series The Great Composers
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Gadgets & Tech

    Ashdown Group: Front-End Developer - Surrey - £40,000

    £30000 - £40000 per annum: Ashdown Group: Front-End Developer - Guildford/Craw...

    Recruitment Genius: Customer Service Assistant

    £13500 - £15000 per annum: Recruitment Genius: A Customer Service Assistant is...

    Recruitment Genius: Senior IT Support / Projects Engineer

    £26000 - £29000 per annum: Recruitment Genius: This is an exciting opportunity...

    Recruitment Genius: Senior Director - Product Management

    £75000 - £85000 per annum: Recruitment Genius: They are the largest and fastes...

    Day In a Page

    Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

    Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

    How a costume drama became a Sunday night staple
    Miliband promises no stamp duty for first-time buyers as he pushes Tories on housing

    Miliband promises no stamp duty for first-time buyers

    Labour leader pushes Tories on housing
    Aviation history is littered with grand failures - from the the Bristol Brabazon to Concorde - but what went wrong with the SuperJumbo?

    Aviation history is littered with grand failures

    But what went wrong with the SuperJumbo?
    Fear of Putin, Islamists and immigration is giving rise to a new generation of Soviet-style 'iron curtains' right across Europe

    Fortress Europe?

    Fear of Putin, Islamists and immigration is giving rise to a new generation of 'iron curtains'
    Never mind what you're wearing, it's what you're reclining on

    Never mind what you're wearing

    It's what you're reclining on that matters
    General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

    Chuka Umunna: A virus of racism runs through Ukip

    The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
    Yemen crisis: This exotic war will soon become Europe's problem

    Yemen's exotic war will soon affect Europe

    Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
    Marginal Streets project aims to document voters in the run-up to the General Election

    Marginal Streets project documents voters

    Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
    Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

    The real-life kingdom of Westeros

    Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
    How to survive a social-media mauling, by the tough women of Twitter

    How to survive a Twitter mauling

    Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
    Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

    At dawn, the young remember the young

    A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
    Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

    Follow the money as never before

    Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
    Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

    Samuel West interview

    The actor and director on austerity, unionisation, and not mentioning his famous parents
    General Election 2015: Imagine if the leading political parties were fashion labels

    Imagine if the leading political parties were fashion labels

    Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
    Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

    Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

    The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence