Chief Executive Officer Marissa Mayer presented her turnaround strategy for Yahoo, while the company reported third-quarter profit and sales that topped analysts’ prior estimates.
Revenue, excluding traffic and partner acquisition costs, was $1,089 million for the third quarter of 2012, representing a 2 percent increase compared to the third quarter of 2011. Operating income was $177 million in the third quarter of 2012, compared to $175 million in the third quarter of 2011. Excluding restructuring charges for both years, income from operations decreased 14 percent to $152 million in the third quarter of 2012, compared to $177 million in the third quarter of 2011. Product development costs declined 5.2 percent to $217.3 million in the period, while sales and marketing expenses decreased 7.3 percent to $269.3 million. The sales increase was driven by gains in search-related ads, which climbed 11 percent to $414.1 million, minus sales passed to partner sites. Display advertising on that basis was little changed at $451.6 million. The company realized a gain of $2.8 billion related to the sale of Alibaba shares and restructuring charges of $16 million, net of tax.
CEO Mayer indicated that her operating plan was to grow in strides with their competitors in online search, display advertising, and mobile applications, saying “Our vision and direction for Yahoo is to make the world’s daily habits inspiring and entertaining,” Mayer said. “We’ll become a growth company by inspiring and delighting our users.” Further discussed was the company plans to focus on small acquisitions and startups, (under $ 100 million), as a way to grow the company and bring new product and technology into the company.
As disclosed in a regulatory filing, that Yahoo obtained a $750 million credit line with Citigroup Inc. (C) and HSBC Holdings Plc, to be used for general purposes and which may be increased by as much as $250 million. Mayer has also recruited new executives to power the company’s turnaround in areas of chief of operations, chief financial operations, and marketing.Pages: