Yahoo!
said Tuesday its second-quarter profit rose sharply from a year ago,
but revenues lagged, offering a mixed picture for chief executive
Marissa Mayer's turnaround efforts.
Net profit rose 46 percent
from a year ago to $331 million, slightly better than expected, but
revenues excluding payments to partners fell one percent to $1.07
billion, the Internet giant said.
"I'm
encouraged by Yahoo!'s performance in the second quarter. Our business
saw continued stability, and we launched more products than ever before,
introducing a significant new product almost every week," said Mayer.
Mayer
cited the company's new Yahoo! News, the new Yahoo! Sports app, the
redesigned Yahoo! search, the new Flickr, the new Yahoo! Mail for
tablet, the Yahoo! Weather app, and the company's new Yahoo! app with
Summly.
"This quarter drove tremendous
improvements in our product line and our users responded with increased
usage and engagement," she said.
She said the quarter was "one of the most productive in the history of Yahoo!"
The
company's strategy is based on "people and products, then traffic and
revenue," she said, and that traffic is now growing again.
Mayer was hired from Google a year ago to help turn around the Internet pioneer, which had seen its fortunes fade.
Since then, Yahoo! has been on a buying spree, and has also sold shares in China's Alibaba to boost its cash.
Its
most publicized deal was a billion-dollar acquisition of the blogging
platform Tumblr, expected to help bring a younger audience to Yahoo!.
For
its key advertising segments, however, Yahoo! saw its display revenues
excluding partner payments fall 11 percent to $423 million, while search
ad revenue on the same basis fell five percent to $385 million in the
quarter.
"Fortunately for the still-new CEO
Marissa Mayer, Yahoo! is currently not being judged on its revenue
growth as the company is shrinking some efforts to focus on better
earnings opportunities elsewhere," said Jon Ogg at 247 Wall Street.
"Yahoo! showed that it made nine acquisitions to strengthen its products, content, technology, and people."
Shares in Yahoo! fell 2.2 percent to $26.29 in after hours trade.
In a negative for Yahoo!, the company downgraded its outlook for revenues for the third quarter and the full year.
According to the research firm eMarketer, Yahoo! has failed to keep face with rivals in advertising.
Despite
seeing growth, Yahoo's share of global digital ad spending is expected
to decline to 3.1 percent in 2013 from 3.37 percent last year, eMarketer
said. Google and Facebook are grabbing a larger share of that market.
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