Yahoo sales beat analyst expectations
(MoneyWatch) For the first time in four years, Yahoo (YHOO) sales are moving in the right direction. After the market closed Monday the Internet company topped analyst expectations in announcing revenue of $1.35 billion for the fourth quarter of 2012, up 2 percent compared to the year-ago period.
For all of 2012, Yahoo reported revenue of $4.99 billion, essentially flat compared to the company's 2011 sales. Earnings of 23 cents per share were down from 24 cents per share in 2011. On average, stock forecasters had expected sales of $1.21 billion for the quarter and $4.46 billion for 2012. Analysts thought that earnings per share would be 28 cents.
"During the quarter we made progress by growing our executive team, signing key partnerships including those with NBC Sports and CBS Television, and launching terrific mobile experiences for Yahoo! Mail and Flickr," said Yahoo CEO Marissa Mayer in a statement. "At the same time, we achieved tremendous internal transformation in the culture, energy and execution of the company."
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Mayer, previously an executive with Google (GOOG), was a dark-horse candidate for the position when Yahoo hired her last July. Since taking the reins at Yahoo, she has taken a number of steps to emulate Google's culture and even strategy. A report by Kara Swisher at the AllThingsD blog claims that some top Yahoo executives think the company should position itself as the "Google of content," even though many would argue that Google itself is the Google of content.
One problem Yahoo has had for years, going back through the tenures of previous CEOs Carol Bartz and company co-founder Jerry Yang, has been a lack of a coherent overall strategy. Instead, the company has offered a collection of individual services -- email, financial information, news, and sports, for example -- that are popular but do not offer a firm the kind of recognizable identity that could be the basis of branding, marketing and sales.
In an interview last week at the World Economic Forum Meeting in Davos, Switzerland, Mayer seemed to equate a mobile strategy with Yahoo having services that could satisfy the most common interests of mobile users. The problem is that many others, including Apple (AAPL) and Google, offer similar services, with these giants also having the advantage of being able to integrate their services into their popular mobile platforms.
Yahoo reported search revenue of $482 million for the quarter, up 4 percent over the comparable period last year. For all of 2012, the company had $1.9 billion in search revenue.
Yahoo has churned through a number of leaders in recent years amid shrinking profits. Yahoo sought to further strengthen its management in December by revamping its board of directors.
Perhaps Mayer's greatest challenge in turning Yahoo around: Re-defining the company in an era of mounting competition from Google, Amazon (AMZN) and other Internet industry giants.
Although it is early days in that effort, investors so far appear encouraged with the company's recent moves, which have included stock buybacks and an acquisition. Yahoo's stock price has risen since late last year and closed Monday at $20.31, near the company's 52-week high. The share was up nearly 4 percent in after-hours trading.