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Yahoo has released its first quarter financial report, which includes both good news and bad news. On the positive side, income was up. On the negative side, revenue failed to meet expectations, and the advertising business is still in a slump.
All Things D's Kara Swisher reported, "Yahoo reported a solid earnings surprise in its first quarter report today, garnering 35 cents a share compared to 24 cents expected by analysts. But, of more concern, revenues remained lower than expected, at $1.07 billion in the three months, compared to estimates of $1.1 billion or more. Those revenue improvement hopes were already very low — Wall Street had hoped for small two percent upside, which is well below by a major magnitude to the performance by its competitors such as Google and Facebook, which have seen robust revenue growth."
Nicole Perlroth with The New York Times added, "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 percent, buoyed less by optimism in Yahoo than Wall Street’s giddiness over Alibaba, the Chinese Internet company in which Yahoo retains a 20 percent stake."
The AP's Michael Liedtke noted, "Yahoo's Internet advertising revenue crumbled further during the first three months of the year, renewing doubts about the company's turnaround efforts despite a surge in earnings. The results released Tuesday seemed to dim some of the aura surrounding Yahoo CEO Marissa Mayer, who was lured away from a top job at Google Inc. nine months ago to revive revenue growth at a company that has been mired in a malaise for years."
Jeff Bercovici with Forbes observed, "Yahoo disappointed on both the display advertising and search revenue fronts. The display performance was especially worrisome, with the total volume of ads sold falling 7% year over year and the price per ad dropping 2%. That’s not how it was supposed to work. Reducing the ad clutter on Yahoo’s pages was supposed to drive ad rates up. Mayer assured analysts that would still be the case, after an adjustment period. She cited the migration of users to mobile, where ad rates are lower, as another factor depressing ad rates, promising that mobile rates will also rise in due course."