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New Yahoo CEO won’t snub content biz

CFO says Mayer will seek to find balance with tech

What the surprise CEO appointment of Marissa Mayer will mean for Yahoo didn’t get much clarity on a second-quarter earnings call Tuesday, but there was no shortage of analyst reaction to fill the vacuum left by the beleaguered tech giant’s silence.

Absent from the call was Mayer, who was a day removed from leaving Google, or Ross Levinsohn, the interim CEO whose future at the company remains uncertain. In their stead was CFO Tim Morse, who indicated it was too soon for Mayer to represent the company and repeatedly cautioned that he couldn’t offer much future guidance on the company given the transition.

But at one point in the conference call with analysts, Morse seemed to scotch speculation that Yahoo would pull away from its strength in content to focus on technology in keeping with Mayer’s experience in product management and engineering.

“It’s safe to say we need to be really good at certain technologies and need to be great at content,” said Morse. “Both are imperative to our success. Our new CEO brings a strong technology background but we also have exceptional, deepening media experience as well.”

Most analyst questions centered on Yahoo’s Q2 earnings, which topped Wall Street earnings projections but were still flat vs. the same quarter last year. Company reported $1.22 billion in revenue, a hair under the $1.23 billion of last year, but above the $1.09 billion analysts expected. Net income was also flat, with search and display revenues both up slightly vs. 2011.

Yahoo’s silence didn’t keep analysts from weighing in on the impact of Mayer’s appointment. Anthony DiClemente, analyst with Barclay Equity Research, essentially echoed Morse’s comments that the new CEO’s background shouldn’t mean Yahoo will put the brakes on its content strategy. “While Ms. Mayer does not possess a content background, we expect Yahoo’s media strategy to continue forward with an emphasis on developing and improving its content offerings, as Yahoo’s core content properties remain its greatest assets for driving traffic,” DiClemente said.

But other analysts took issue with Mayer’s inexperience in the top job at a tech company, especially one the size of Yahoo. “Mayer has never been in a CEO role before, much less for a company as large as Yahoo,” said Doug Anmuth with JP Morgan.

Others including Brian Wieser, analyst with Pivotal Research Group, cautioned to keep an eye out for continued executive shuffling at Yahoo. The fate of Levinsohn could prove particularly problematic, he warned.

“A failure to retain him and the other new hires would potentially add to disruption to a company that does not need any more,” said Wieser.

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