Company struggling for ad dollars
Prospects for a potential sale of Yahoo could be “slow” as the board looks at a range of options to return the company to growth, the netco’s interim CEO told Wall Streeters on Tuesday as the company unveiled its third-quarter earnings.
Tim Morse, Yahoo’s chief financial officer who was tapped as interim CEO following last month’s messy exit of CEO Carol Bartz, told disappointed Wall Streeters that the much-anticipated update on the Internet giant’s strategic future “will not be today and will not be on this call.”Morse flatly told investors that decisions on the company’s future will be some time in coming.
“The board wants to do what’s best for the company. The board’s process will be what it will be, and the timing will be what it will be,” Morse said on a conference call.
Not having a clear presence at the helm is also proving a distraction. Morse reiterated that “the search is under way” to find one.
Yahoo’s profit and revenue both fell in the quarter ended Sept. 30 but the numbers still matched or beat expectations and the shares rose in after-hours trading.
The stock has been buffeted by takeover speculation since the board hired investment bankers to review options. A fresh round of rumors has surfaced about a possible hookup with AOL. A handful of other companies have expressed interest.
Life can be harsh for a standalone Internet company as online options proliferate and there’s intense competition for viewers and advertisers.
Google last week announced a 33% spike in revenue for the quarter.
Yahoo’s profit fell by 26% or more than $100 million to $293 million in the quarter from the year before. Revenue fell 24% to $1.6 billion.
What Yahoo calls revenue ex-TAC, or excluding sales passed on to partners, eased 5% to $1.07 billion.
The company predicted that fourth-quarter revenue will be between $1.13 billion and $1.24 billion.
Morse emphasized Yahoo’s efforts to aggressively restructure its sales team and said productivity “is ramping up.” Major campaigns and advertisers include Jaguar, Levis, Paramount and TV networks promoting their fall lineups.
“Our efforts with agencies and large advertisers are different. We have to be more flexible and earn the business in a much more competitive market,” he said.
Yahoo’s total display revenue was flat at about $450 million year on year. Higher-priced, or guaranteed, display ad sales rose, offset by a decline in lower-priced non-premium sales.
Search revenue fell 13% from $428 million.
Yahoo said it had extended a search agreement with Microsoft through 2013. The pact guarantees revenue Yahoo can earn per search and, Morse, said, eliminates a variable that made investors uncomfortable.
The company recently announced a strategic alliance with ABC News, and a slate of original Web shows on Yahoo Screen.
“My focus, and that of the whole company, is to move the business forward with new technology, partnerships, products and premium personalized content — all with an eye toward growing monetization,” he said.
Yahoos shares closed Tuesday down 1.46% at $15.47. Quarterly earnings were announced after market close and the stock popped 2.59% in late trading.