Yahoo’s new CEO skips earnings call as Q2 revenue & profit shrink, invests in …
Yahoo Inc’s new chief executive, Marissa Mayer, and Ross Levinsohn, the administrative whom she replaced, both sat out the company’s second quarter earnings call Tuesday.
The once iconic Internet company caught analysts, investors and industry watchers abruptly Monday when it announced that it had poached Mayer from Google Inc to be its next CEO. Many had assumed that when a stellar run as interim-CEO that Levinsohn will be named to the placement on an enduring basis simultaneous with its earnings announcement.
“Since it truly is Marissa’s first day at the job she’s going to not be joining us at the call. However, she is particularly mindful of the significance of the investor community and i am sure that you will be hearing from her soon,” said Yahoo Chief Financial Officer Tim Morse, who led the decision solo for the corporate.
Mayer’s first day at Yahoo coincided with its reporting of flat net revenue and a slight decline in profit in the course of the second quarter.
Shares of Yahoo were down 3 cents at $15.57 in after-hours trading on Tuesday.
Yahoo’s revenue has “basically been flatlined for a long time,” said Macquarie Research analyst Ben Schachter.
“Flat seriously is not where bulls want it to head, but it isn’t falling off a cliff either.”
Some observers have speculated that the surprise hiring of Mayer signals Yahoo’s intention to resume its give attention to Web technology and products instead of beefing up online content.
Yahoo’s Morse provided few information about the company’s future strategy or plans, noting that the company’s direction “does remain to be seen” in light of the brand new CEO.
The Ross question
The latest management shuffle at Yahoo raised questions on the way forward for Levinsohn, who has played a key role revamping Yahoo’s media and sales operations.
Whether Levinsohn remains at Yahoo “depends at the chemistry” between him and Mayer and at the commitment the corporate is willing to make to media, said one source almost Levinsohn.
“In the perfect world you would be ready to keep him around to assist improve the final media offering,” said Nomura Securities analyst Brian Nowak.
“If he does leave, it does leave a void that they’ve to fill at the media side,” Nowak said.
Some industry insiders believe the advent of Mayer could help recruiting efforts at Yahoo, which in recent times has not been considered one of the most desirable destination among Silicon Valley’s engineers and product managers.
Google’s first female engineer, Mayer helped develop Google Search and oversaw a few of Google’s key products, including Google News and Gmail during her 13-year tenure on the search company.
Some former colleagues who’ve worked with Mayer noted that her “intense” personality could make her “rough round the edges” and hard to accommodate, but additionally they noted Mayer’s commitment to mentoring co-workers through a distinct program that she spearheaded at Google.
The 37-year-old, who hasn’t ever been a CEO before, will face an impressive challenge in attempting to revive Yahoo’s fortunes.
Yahoo remains one of the crucial world’s finest websites, with greater than 700 million monthly visitors, in keeping with the corporate. However the company has seen its revenue growth stall, amid an industry-wide decline in online display advertising prices and competition from Facebook Inc and Google.
Visitors to Yahoo-branded websites increased 2 per cent year-on-year in the course of the second quarter, Yahoo said. But queries on Yahoo’s US core search websites declined 17 per cent in the course of the second quarter, the variety of minutes visitors spent on its media properties fell 10 per cent.
Yahoo’s net revenue, which excludes fees paid to partner websites, was $1.081 billion within the three months ended June 30, when compared with $1.076 billion as we speak last year.
Analysts polled by Thomson Reuters I/B/E/S were seeking out net revenue of $1.096 billion.
Mayer’s hiring caps a tumultuous year at Yahoo. In May, Scott Thompson resigned as CEO after lower than six months at the job as an argument flared up over his academic credentials.
Thompson replaced the outspoken and sometimes foul-mouthed Carol Bartz, who was fired in September after failing to revitalize Yahoo.
Morse said at the call that Yahoo desired to give Mayer “time to get acclimated” with the corporate before providing forward guidance for the rest of the year.
Yahoo’s second-quarter net income was $226.6 million, or 18 cents a share, down slightly from roughly $237 million, or 18 cents a share, within the year ago period.
Excluding certain items, Yahoo said it earned 27 cents a share, above the 22 cents a share expected by analysts.
Yahoo said its revenue from online display ads increased 2 per cent year-on-year to $535 million, while its search revenue decreased 1 per cent to $461 million.
“Until you are able to somehow get more clarity on how they will improve these user trends and the monetization behind them, it’s hard to get more positive at the business,” said Nomura’s Nowak.
Yahoo Japan buys stake in Cloud storage firm Basho
Yahoo Japan subsidiary IDC Frontier has invested $6.1 million in Basho Technologies, a US distributed-data and cloud-storage technology firm, and could use Basho’s technology in its own cloud-computing platform, Basho said.
IDC Frontier will deploy Cambridge, Mass.-based Basho’s riak software in its cloud platform and help Basho roll out its technology throughout Japan.
Cloud computing is the delivery of computing and storage capacity that permits users to, for example, rent servers and software to store data over a network.
Yahoo Japan is a three way partnership between Yahoo Inc. and Japan’s Softbank Corp., which together own a 35 per cent holding in Yahoo Japan. It’s one among Yahoo Inc.’s most respected assets.
Yahoo Inc. has considered selling its stake in Yahoo Japan. Earlier this year it sold a part of its stake in China’s Alibaba Group, an ecommerce company, for $7.1 billion.
IDC Frontier’s investment in Basho comes as Yahoo Inc. involves grips with the appointment of its third chief executive officer this year.