Yahoo! blames so-so revenues on 'sluggish' search
Bing tests ahoy!
After all that Meltdown-induced cost-cutting and Bartzian reshaping, Yahoo!'s profits rose 32 per cent during the second quarter. But revenues grew a mere two per cent, failing to reach the expectations of both the Wall Street guessmen and Yahoo! itself.
"We continued on our promise to improve operating income and margins," chief executive Carol "F Bomb" Bartz said during a conference call with analysts and reporters. "But we were on the low-end of our revenue guidance."
Bartz said that although the company's share of the search market grew during the second quarter, it didn't "monetize searches as much as we expected." In other words, as Yahoo! prepares to replace its own search infrastructure with Microsoft, the serious search dollars just aren't there.
"Search was basically sluggish for us the whole quarter," Bartz said.
What's more, Bartz said, several big display advertisers "pulled back" on their spending at the end of June. Nonetheless, display revenue from Yahoo! owned and operated sites rose 19 per cent, and Bartz indicated that those large advertisers have already pumped up their spending in Q3.
"The second week of June, we saw demand slow down as a handful of advertisers puled back," Bartz said. "We believe it was due to quarterly expenses manage for [these] companies. The first few weeks of July indicate we're back to normal."
During the quarter ending June 30, Yahoo! pulled in revenues of $1.601bn, up from $1.573bn during the same period last year, when the company was at a low ebb. But now that Bartz has significantly streamlined operations, profits were up 32 per cent – if you exclude certain restructuring charges in 2009 and 2010.
Net revenue - which excludes dollars Yahoo! shares with partner websites - topped out at $1.13bn. Wall Street guessmen polled by Thomson Reuters had expected $1.16bn.
Bartz said that during the quarter, Yahoo! moved 125 search employees over to Microsoft, and the company has begun testing a setup where Microsoft will power about 25 per cent of Yahoo! organic searches and "a lower percentage" of paid searches.
Microsoft has said that it will take over Yahoo!'s organic search in September and its paid search in October. Bartz indicated that this is still the plan, but she also suggested that the paid search switch may come later. "Because the holiday season is so important to our advertisers, we will not give the go-ahead for the US and Canada unless we're confident of a smooth transition – with quality."
In a sudden change of tact, Bartz also acknowledged that Yahoo! is still a technology company, plugging its use of Hadoop, the open source distributed number-crunching platform. "Hadoop is a core technology behind every click on Yahoo!," she said.
"Our approach to Hadoop development has won us a lot of admirers, not just for the huge amount of technology expertise required to build it, but for making it open source."
Hadoop didn't actually begin life at Yahoo! But Yahoo!'s involvement certainly bootstrapped the platform. It is still the project's largest contributor.
Nice of Bartz to take notice. ®
Perhaps removing all the cr*p would improve revenue
I have both Yahoo! and Google e-mail accounts.
Google has a simple interface, runs well, and I've only had to opt out of social networking idiocy once.
Yahoo! seems to "upgrade" its e-mail on a monthly basis, enabling chat, activity sharing, and who knows what else every time I log in. I've taken to checking my preferences every month to turn off all the social networking idiocy they've enabled that month.
My solution was to lock down all the non-essential scripting stuff on Yahoo! mail using NoScript and FlashBlock, so my visits and viewings of ads are most likely no longer recorded. Yahoo!'s insistence on trying to get me involved in every social networking fad on the planet has resulted in a loss of revenue for them because I've disabled scripts and never touch their ads for fear I'll be signed up for even more idiocy.
I doubt I'm the only one.
"Just do what I've asked you to do, and don't try to 'improve' my user experience. You will fail."
Yahoo deserves to fail big time ...
... if only because of its insidious policy to foist is crapware unwanted on users that never asked for it in the first place.
Far too many products are coming with a so-called "optional" Yahoo toolbar, which is turned on by default. That's not an option, its an imposition.
Have a look at your own browser now. Does it have a yahoo toolbar, and did you actively choose to put it there? For far too many people, the answers will be "yes" and "no" respectively.
I vote we all actively remove Yahoo from our browsers. It's not easy I know, perhaps somebody can come up with an automated tool that does it and, preferably, blocks future surreptitious installations.
Better still, I vote that the twits that chose to offer it as an "option" in their products have an immediate rethink, use some elementary common sense and change the install option so that it is OFF BY DEFAULT.
If you don't, then it's not just Yahoo that we'll start boycotting. It's YOU too!
Just thinking out loud...
Reading this and remembering Yahoo is going in for using the MS stuffage in place of their own got me thinking. Most the average every day non-techy people I know using Yahoo for email and searches do so to get away from or avoid using Microsoft's stuffage. I wonder how many do this over all and if the coming changes will result in further drops in usage of Yahoo over all.