Feeds

Yahoo! profits! soar! on! falling! revenues!

And that's what they call stability

Top 5 reasons to deploy VMware with Tegile

Google says the worst of the economic meltdown is behind us. But Yahoo!'s take on the matter is a bit more guarded. After its revenues took another dip during the third quarter, dropping 12 per cent year-on-year, the best Carol Bartz and company can say is that the economy is "loosening-up a bit."

Controlling more than 60 per cent of the search market, Google endured only the smallest of revenue hiccups over the last twelve months of worldwide economic crisis, and in Q3, Mountain View's revenues lept a healthy 7 per cent year-on-year. But at Yahoo! - where display ads are far more important to the bottom line - the meltdown's darkest days were far darker. You could argue they're still lingering. Revenues topped out at $1.575 in Q3, compared to $1.786bn last year.

The good news is that after some considerable belt-tightening in the wake of its 2008 third quarter, Yahoo!'s profits more than tripled in Q3 2009, from $54m to $186m.

The company also points out that revenues decreased only one percent from the second quarter, after much greater sequential shrinkage in previous quarters. "With revenue coming in above our guidance and flat sequentially, we had a solid third quarter that signals our major businesses have stabilized," CEO Carol Bartz said in a Yahoo! press release.

According to CFO Tim Morse, Bartz fell ill this morning, and she was not on the company's quarterly earnings call with reporters and analysts. So Morse has to spin that the quarter all on his own. "Overall the theme for third quarter was stabilization, as we saw strength in key areas of our business are two straight quarters of deceleration," Morse said. "I'm gonna refer to sequential trends on this call, much more than we have in the past, because they tell us much more about what's currently happening in our markets."

The company's all-important display-ads revenue was down 8 per cent from last year, but it was up from Q2, giving Yahoo! its second straight quarter of sequential growth. Search revenue was down 19 per cent year-on-year. Whereas queries were up, revenue per search was down. But as you might expect, Morse argued that search is stabilizing as well. After sharper sequential declines in the first half, he said, third quarter results declined just one per cent compared to Q2.

Of course, Yahoo! hopes to juice its search biz through a pact with Microsoft, and Morse said the company still expects the deal to close in early 2010.

After its Q2 earnings call, Yahoo! said it would feed $75m into new hires, new tech, and its very own Yahoo!-trumpeting ad campaigns - despite its continued revenue slide. But Morse said the company didn't spend quite as much as it anticipated. The spending increase was closer to $50m.

"We didn't hire as quickly as we'd planned," he said, "and that contributed to about a third of the under-run. Though we would have preferred to ramp headcount at the originally forecasted past, we're taking the time to ensure we're hiring the right people in the right places." Thus, the bigger-than-expected profit spike.

Morse avoided any Schmidtian proclamations, but he said that better display ad yields in Q3 were "a sign...of the economy starting to loosen-up a little bit and brand advertising starting to happen again." ®

Beginner's guide to SSL certificates

More from The Register

next story
The 'fun-nification' of computer education – good idea?
Compulsory code schools, luvvies love it, but what about Maths and Physics?
Facebook, Apple: LADIES! Why not FREEZE your EGGS? It's on the company!
No biological clockwatching when you work in Silicon Valley
Happiness economics is bollocks. Oh, UK.gov just adopted it? Er ...
Opportunity doesn't knock; it costs us instead
Ex-US Navy fighter pilot MIT prof: Drones beat humans - I should know
'Missy' Cummings on UAVs, smartcars and dying from boredom
Yes, yes, Steve Jobs. Look what I'VE done for you lately – Tim Cook
New iPhone biz baron points to Apple's (his) greatest successes
Lords take revenge on REVENGE PORN publishers
Jilted Johns and Jennies with busy fingers face two years inside
Sysadmin with EBOLA? Gartner's issued advice to debug your biz
Start hoarding cleaning supplies, analyst firm says, and assume your team will scatter
Edward who? GCHQ boss dodges Snowden topic during last speech
UK spies would rather 'walk' than do 'mass surveillance'
Doctor Who's Flatline: Cool monsters, yes, but utterly limp subplots
We know what the Doctor does, stop going on about it already
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
Three 1TB solid state scorchers up for grabs
Big SSDs can be expensive but think big and think free because you could be the lucky winner of one of three 1TB Samsung SSD 840 EVO drives that we’re giving away worth over £300 apiece.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.