Yahoo continued to struggle with online ad sales in Q4

Revenue and net income both declined year-on-year

Yahoo struggled selling both display and search advertising in the fourth quarter, as its revenue and net income both dropped year-on-year.

Subtracting the commissions paid to partners, Yahoo's revenue fell 3 per cent to $US1.17 billion in the quarter ended Dec. 31, missing the $US1.19 billion consensus expectation from analysts polled by Thomson Reuters. Gross revenue dropped 13 per cent to $US1.32 billion.

Net income fell 5 per cent to $US296 million, although earnings per share were flat at $US0.24, matching analysts' consensus expectation.

Scott Thompson, the former PayPal president who was recently appointed Yahoo CEO, put a positive spin on the results, saying in a statement that the company "continued to make progress", offering its 10 per cent operating income increase as proof.

"In 2012 we will be aligning resources behind key areas of focus to enable us to move aggressively in market and grow our business, bringing innovative new products and experiences to both our users and advertisers," he said in the statement.

For the full fiscal year, revenue came in at $US5 billion, down 21 per cent compared with 2010. Subtracting partner commissions, revenue was $US4.4 billion, down 5 per cent. Revenue for the full year was impacted in part by Yahoo's search advertising partnership with Microsoft, in which Yahoo pays Microsoft a commission on search ad sales and which includes a change in how Yahoo reports search ad revenue, the company said.

Advertising sales dropped across the board during the quarter for Yahoo. Subtracting commissions, display ad revenue fell 4 percent, while search ad revenue dropped 3 percent. Gross revenue fell 4 per cent for display ads and 27 per cent for search ads.

Yahoo's online ad sales performance contrasts with the overall market, which has been growing this year. For example, in the US in the third quarter, online ad revenue grew 22 per cent, according to the Interactive Advertising Bureau.

By comparison, Google, which makes most of its money from online ads as well, increased its revenue 25 percent in the fourth quarter.

For the full fiscal year, Yahoo's profit also fell, with net income shrinking from $US1.23 billion, or $US0.90 per share, to $US1.05 billion, or $US0.82 per share.

Yahoo has been in more turmoil than usual since Carol Bartz was fired as CEO in early September. There have been rumors that the board may sell the company entirely or in parts. Earlier this month, Thompson was brought on board to replace Bartz and last week co-founder Jerry Yang left the company.

Juan Carlos Perez covers search, social media, online advertising, e-commerce, web application development, enterprise cloud collaboration suites and general technology breaking news for The IDG News Service. Follow Juan on Twitter at @JuanCPerezIDG.

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Juan Carlos Perez

IDG News Service
Show Comments

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

George Khoury

Sharp PN-40TC1 Huddle Board

The biggest perks for me would be that it comes with easy to use and comprehensive programs that make the collaboration process a whole lot more intuitive and organic

David Coyle

Brother PocketJet PJ-773 A4 Portable Thermal Printer

I rate the printer as a 5 out of 5 stars as it has been able to fit seamlessly into my busy and mobile lifestyle.

Kurt Hegetschweiler

Brother PocketJet PJ-773 A4 Portable Thermal Printer

It’s perfect for mobile workers. Just take it out — it’s small enough to sit anywhere — turn it on, load a sheet of paper, and start printing.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?