SAN FRANCISCO - Yahoo's (YHOO) latest quarterly report shows CEO Marissa Mayer is
still having trouble bringing in more revenue as online advertisers spend more
money at Google, Facebook and other rivals.
results announced Tuesday serve as the latest reminder of challenges facing
Yahoo. The long-slumping Internet company hoped to revive its revenue
growth when it lured Mayer away from a top job at Google (GOOG) 18 months
So far, though, Yahoo's revenue remains stuck in a rut. The company's earnings are rising largely because of cost-cutting measures and lucrative investments in two Asian Internet companies, China's Alibaba Group and Yahoo Japan. Both were made before Mayer's arrival.
fell $1.12, or nearly 3 percent, to $37.10 after the fourth-quarter numbers
Yahoo earned $348 million, or 33 cents per share, a 28 percent increase from $272 million, or 23 cents per share, a year earlier. Excluding certain one-time items, Yahoo earned 46 cents per share. That figured topped the average estimate of 39 cents per share among analysts surveyed by FactSet. Revenue fell 6 percent to $1.27 billion. After subtracting commissions paid to Yahoo's ad partners, revenue totaled $1.2 billion, in line with analysts' projections.
"I'm encouraged by Yahoo's performance in Q4 and 2013 overall," said Yahoo CEO Marissa Mayer, in a statement. "We saw continued stability in the business, and our investments allowed us to bring beautiful products to our users and establish a strong foundation for revenue growth."Mayer also said the company is pleased with the growth in Yahoo's traffic, calling it "an early sign of return on our investments and the acquisitions we’ve made."
Yahoo's 24 percent stake in Alibaba has been
particularly valuable because the Chinese company is still growing rapidly as
it prepares for an initial public offering of stock. Numbers released Tuesday
by Yahoo show that Alibaba's revenue surged 51 percent in the third quarter.
There is a one-quarter lag between when Alibaba closes its quarter and Yahoo collects
its share of Alibaba's earnings.
Alibaba's allure is the main
reason Yahoo's stock has more than doubled since Mayer became CEO. But some of
those gains are starting to fade as investors become weary of waiting for her
to deliver on her promise to boost Yahoo's ad sales.
Mayer, 38, appears to be getting frustrated, too. Earlier this month, she dismissed Chief Operating Officer Henrique de Castro, who was in charge of the company's advertising. Mayer had enticed him away from Google in late 2012 with a pay package valued at $58 million at the time.