Shares at Yahoo enjoy revival as new boss spells out plans
Nikhil Kumar is The Independent's New York correspondent. He was formerly assistant editor on the foreign desk and has also done a variety of jobs on the city desk, where he wrote about markets, commodities and other business and economics topics.
Tuesday 23 October 2012
Yahoo's new boss, Marissa Mayer, pulled off a sparkling first impression yesterday, cheering Wall Street with better-than-expected third-quarter results as she outlined her plans to revive the struggling internet giant.
The update, the first since ex-Google executive Ms Mayer took over at Yahoo over the summer, immediately sent the company's shares up by around 3 per cent in after-hours trading. Stripping out the $2.8bn boost from a long-awaited sale of its shares in China's Alibaba e-commerce group, Yahoo booked $177m in operating income, while adjusted earnings were reported at 35 cents per share – well above market forecasts of 25 cents.
But no sooner had the numbers been published than attention turned to Ms Mayer's plans, as she attempts to turn the business around. The 18-year-old Yahoo, which went from being one of the internet's pioneering websites to a giant online conglomerate before encountering troubles as upstart rivals such as Google pulled ahead, has had four chief executives in four years.
Against this backdrop, the new boss was clear last night that her era would not mark a "giant pivot" for Yahoo. Instead, she wanted to renew efforts to make the most of businesses such as search, mail and other areas where the company already has a strong platform.
"The core components of Yahoo's business… are also the core products that I've built my career on," she said. "I came to Yahoo to grow and help redefine one of the internet's most beloved companies."
Part of this, she hinted, meant making more of the opportunity presented by people's growing proclivity for accessing online products and services via mobile devices such as smartphones. She added that she also wanted to hire more mobile engineers.
There was much interest in whether or not Ms Mayer would go on a spending spree, boosting Yahoo with new big-ticket buys. But on conference call with analysts, while leaving the do or open to new deals, she seemed to play down the prospect of one large transaction.
Even before the results, Ms Mayer had begun to make her presence felt with an infusion of fresh blood: earlier this month, for instance, she marked her return from maternity leave with the announcement of a senior hire, naming her former Google colleague Henrique De Castro as Yahoo's new chief operating officer. He is expected to begin in his new role in early 2013.
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