Yahoo revenue continues to plunge for third straight quarter
Yahoo announced another steep drop in net revenue today, citing the limping online advertising market for search and display ads as the cause for losses spanning three consecutive quarters. On a (dimly) positive note, the company did see second-quarter earnings per share that beat analysts’ expectations — but mostly due to severe cutbacks (its net income increased by almost 8 percent to $141.4 million for the same reasons).
Not only did revenue decline yet again (hitting $1.58 billion), it dropped further: 16 percent in the second quarter, compared to 14 percent in the first of last year. Year-over-year, it dipped 13 percent. This is fairly damning data considering that Yahoo’s arch rival, Google, posted a 3 percent uptick in year-over-year revenue last week.
Yahoo was hobbled this quarter by a 15 percent free fall in search advertising revenue — a much higher figure than market watchers has predicted. Similarly, revenue from display ads dropped 14 percent since last year. Compounding the situation, revenue from the company’s affiliate sites dropped 9 percent to $520 million. To combat these trends, Yahoo laid off close to five percent of its staff. For now, it says it will continue looking at non-headcount related strategies for trimming costs, but that might be a pipe dream.
CEO Carol Bartz is putting a positive spin on the company’s earnings announcement, emphasizing that the number beat out analyst projections of $1.14 billion in net revenue. A new sense of confidence is evident in the company’s projections for third quarter revenue between $1.45 and $1.55 billion. In addition, it just rolled out a bold new redesign of its homepage meant to highlight the most profitable facets of the business.
Still, however, many wonder whether the weak report will spur Yahoo to agree to a partnership with Microsoft, giving the latter some control over its search operations.
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About the Author, Camille Ricketts
Camille is the lead writer for GreenBeat. She came to VentureBeat from Google where she worked on its traditional platforms team, particularly in TV. Before that, she was a reporter for the Wall Street Journal in New York and London. Follow her on Twitter at @camillericketts, and follow VentureBeat on Twitter at @venturebeat.
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