 "Yahoo! profit rises 36%")
Yahoo! is still doing better as an investment house than as an internet company. Its first-quarter earnings beat analysts’ expectations, but much of the gain was from its investments abroad. Since Marissa Mayer left Google to lead Yahoo! nine months ago, the company’s stock is up more than 50 per cent, buoyed less by optimism in Yahoo! than Wall Street’s giddiness over Alibaba, the Chinese internet firm in which Yahoo! retains a 20 per cent stake.
Alibaba has signalled that it is preparing for an initial public offering that analysts predict could value it at $55 billion to more than $120 billion, double to five times more than Yahoo!’s $26.2-billion market capitalisation.
On Tuesday the company reported that net income in the first quarter rose 36 per cent to $390 million, or 35 cents a share, from the year-ago quarter. Wall Street analysts had expected net income of 24 cents a share. But much of that was because of Alibaba. The income contribution from Yahoo!’s equity interests in Alibaba and Yahoo! Japan was $217.6 million, well above its own first quarter operating income of $186 million.
Meanwhile, Yahoo!’s revenue was down. The company said revenue was $1.14 billion, down 7 per cent from the year-ago quarter. Excluding traffic acquisition costs, revenue was flat at $1.07 billion.
Once the biggest seller of display ads, Yahoo lost that position to Facebook and Google in 2011. In the first quarter, Yahoo’s display ad business fell 11 per cent, to $455 million, compared with a year ago, even as total display advertising increased 18.1 per cent to $17.7 billion in the US, according to eMarketer.
Mayer told analysts Tuesday that she planned to lure back advertisers by starting a “chain reaction” that begins with hiring engineers to improve Yahoo’s core products, which include email, sports and finance offerings, and optimising them for Yahoo’s mobile and tablet users.
© 2013 The New York Times News Service
Alibaba has signalled that it is preparing for an initial public offering that analysts predict could value it at $55 billion to more than $120 billion, double to five times more than Yahoo!’s $26.2-billion market capitalisation.
On Tuesday the company reported that net income in the first quarter rose 36 per cent to $390 million, or 35 cents a share, from the year-ago quarter. Wall Street analysts had expected net income of 24 cents a share. But much of that was because of Alibaba. The income contribution from Yahoo!’s equity interests in Alibaba and Yahoo! Japan was $217.6 million, well above its own first quarter operating income of $186 million.
Meanwhile, Yahoo!’s revenue was down. The company said revenue was $1.14 billion, down 7 per cent from the year-ago quarter. Excluding traffic acquisition costs, revenue was flat at $1.07 billion.
Once the biggest seller of display ads, Yahoo lost that position to Facebook and Google in 2011. In the first quarter, Yahoo’s display ad business fell 11 per cent, to $455 million, compared with a year ago, even as total display advertising increased 18.1 per cent to $17.7 billion in the US, according to eMarketer.
Mayer told analysts Tuesday that she planned to lure back advertisers by starting a “chain reaction” that begins with hiring engineers to improve Yahoo’s core products, which include email, sports and finance offerings, and optimising them for Yahoo’s mobile and tablet users.
© 2013 The New York Times News Service