Yahoo! Q2 2013 Earnings Released : A Mixed Bag Of Results

Yahoo! earnings

Yahoo! commander in chief Marissa Mayer with CFO Ken Goldman.

If Marissa Mayer had thought that she would be celebrating her first anniversary as Yahoo! CEO,  she might have been disappointed. Yahoo! results released on Tuesday show Yahoo Inc.’s earnings climbing to 46 percent, thanks to its investment in Chinese internet company Alibaba. But their revenue fell by 7 percent since last year , showing that all is not well.

Yahoo Key Metrics

Yahoo Financial Metrics- Image courtesy: Marketingland

Yahoo Q2-2014 Highlights

  • GAAP display revenue was $472 million for the second quarter of 2013, a  12 percent decrease compared to $535 million for  the second quarter of 2012.
  •  The Number of Ads Sold (excluding Korea) decreased approximately 2 percent compared  to the second quarter of 2012.
  • Price-per-Price-Ad (excluding Korea) decreased approximately 12 percent compared to the second quarter of 2012.
  • GAAP search revenue was $418 million for the second quarter of 2013, a 9  percent decrease compared to $461 million for the second quarter of 2012.
  • Paid Clicks (excluding Korea) increased approximately 21 percent compared to the second quarter of 2012.
  • Price-per-Click (excluding Korea) decreased approximately 8 percent compared to the second quarter of 2012.

Cash Balance:

  • Cash, cash equivalents, and investments in marketable securities were $4.8 billion as of June 30, 2013  compared to $6 billion as of December 31, 2012, a decrease of $1.2 billion.
  • During the second quarter of 2013, Yahoo! repurchased 25 million shares for $653 million.
  • Yahoo! used a net $1  billion in cash for acquisitions (including a net $970 million to acquire Tumblr)
  • $846 million was received in cash from Alibaba Group on redemption of  preference Shares.

In her one year stint as Yahoo! CEO, Marissa Mayer has tried all the tricks she could think of to turn fortunes around and still keep Yahoo! in reckoning against Facebook and Google. Yahoo! was totally revamped during past year  making it more friendly for new generation users. Mobile and tablet versions of Yahoo Mail,Weather, Flickr, Search and Sports were launched for iPhone and Android phones.

During this quarter Yahoo! made nine acquisitions –  Summly, Astrid, Milewise, Loki Studios, Go Poll Go, PlayerScale, Rondee, Ghostbird Software and Tumblr. These acquisition’s were made with an aim to re-direct the new generation internet users towards Yahoo! and to increase its advertising revenue.

The image change strategy is starting to show results for Yahoo! inc.

The image change strategy is starting to show results for Yahoo! Inc.

Market was expecting a better picture on financial front this quarter. But results presented  a totally different picture, if it were not for the revenue from sale of Alibaba shares, this quarter would have been one of the worst for Yahoo! in recent time.This lackluster growth reflects Yahoo! difficulties in  selling  advertising compared to its rivals Google Inc. and Facebook Inc.

From our point of view, the results of this quarter shouldn’t worry Yahoo!  that much, the bigger worry for Yahoo! and Marissa Mayer should be whether or not their gamble of so many acquisitions pays off. If this gamble pays off, Yahoo! would definitely go on the path of recovering its position as the king of world wide web.

Yahoo’s current portfolio is next only to Google  and if it uses its newly acquired acquisitions properly  it may be able to give both Facebook and Google a run for their money. The first step towards that would be that it needs to integrate all its services seamlessly and effectively and use social media to bring in new audience and keep them coming back.

This task however simple it may sound, is a very difficult task  but Yahoo! and Marissa Mayer don’t have too many options at their disposal.

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One thought on “Yahoo! Q2 2013 Earnings Released : A Mixed Bag Of Results

  1. Pingback: Yahoo! Q2 2013 Earnings Released | Shikhar Tech Labs

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