Yahoo profit rises by 46 per cent, though sales still drag

CEO Marissa Mayer called the results encouraging

Yahoo's profits rose by 46 per cent in the second quarter, aided by nearly a dozen product launches, though sales at the company were still down.

Net earnings for the quarter ended June 30 were US$331 million, up from $227 million for the same quarter last year, Yahoo reported Tuesday.

Revenue, however, was $1.14 billion, a 7 percent decline from last year. Subtracting commissions and fees paid to advertising partners, the Internet company's second-quarter sales were $1.07 billion, about 1 percent down compared to the same period last year.

In its first-quarter earnings, Yahoo, which has struggled in recent years to reinvent itself and maintain its relevance, also reported a 7 percent drop in revenue.

Second quarter net earnings per share were $0.30, approximately a 67 percent increase from $0.18 in the year-ago quarter.

In a statement, CEO Marissa Mayer said she was encouraged by the results, noting that the company's business "saw continued stability, and we launched more products than ever before, introducing a significant new product almost every week."

Those products include a mobile weather app for Apple's iOS operating system, mail software for tablet devices and an updated home page.

In online advertising -- one particular area of struggle for Yahoo with the rise of Google and Facebook -- Yahoo saw mixed results. After subtracting partner commissions, search advertising revenue rose by 5 percent to $403 million, compared to $385 million during the same quarter last year.

Display advertising revenue, on the other hand, fell by 11 percent to $423 million, compared to $473 million last year.

In an effort to place more ads across its Web properties like Yahoo Sport and Yahoo News, the company reached a global advertising deal with Google in February.

Mayer took the top job at Yahoo a year ago. Since then she has mounted an aggressive strategy to rebuild the company through more than a dozen acquisitions -- including Tumblr for more than $1 billion -- as well as product launches, redesigns and shutdowns.

Since starting as CEO, Yahoo's stock has risen by more than 70 percent, though the increase could mainly be due to Mayer's celebrity status and Yahoo's 24 percent stake in the profitable Chinese e-commerce giant Alibaba than to operational improvements, experts said.

The general consensus from analysts polled by the IDG News Service is that while Mayer's efforts are probably headed in the right direction, it is too soon to say whether she will succeed in making Yahoo "cool" again.

Zach Miners covers social networking, search and general technology news for IDG News Service. Follow Zach on Twitter at @zachminers. Zach's e-mail address is zach_miners@idg.com

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Tags social mediainternetbusiness issuesGoogleFacebooksocial networkingfinancial resultsYahooalibabaInternet-based applications and services

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Zach Miners

IDG News Service
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