Yahoo! boss blames revenue dip on better Bing
'Microsoft is so good, it ate our money'
Yahoo!'s revenues took a slight dip during the third quarter — but the much-criticized company posted profits that just beat the expectations of the Wall Street guessmen, thanks in large part to the sale of jobs site HotJobs.
During the company's quarterly conference call with analysts and reporters, CEO Carol Bartz added a bit of color to the festivities by coming out swinging at claims that Yahoo! is a non-technology company on the verge of being sold to a patently insignificant outfit such as AOL.
"Yahoo! is an innovative technology company that operates the largest digital media content and communications business in the world," Bartz said. "The key words here are innovative technology, media, content, and communications. That's what we're all about."
She also hit back at claims that recent departures from the company's executive staff indicate that the company is a complete mess. Bartz pointed out that since she took over the company more than 20 months ago, she has significantly streamlined operations in an effort to "reverse years of decelerating growth."
"We've been working to create a stronger, more disciplined, and focused company. This also includes making our operation more efficient, more lean, and more nimble," she said. "And one byproduct of any change is always movement of people — some people leave, some people get promoted, and some new people arrive."
During the quarter ending September 30, Yahoo! revenues topped out at $1.12bn, excluding the traffic acquisition costs the company pays to partners sites. That's a slight decrease from the $1.13bn pulled in during the same quarter last year, and it just missed the revenue expectations of Wall Street analysts. But profits reached $396 million, a 113 per cent leap from last year, and that put earnings per share at 29 cents, which exceeded Wall Street guesstimates.
Earnings per share were up 126 per cent over the same quarter last year. But that 29 cent per share figure includes 13 cents from the sale of HotJobs to Monster.com. Earnings per share for the third quarter of 2009 reflected the company's stake in Japanese search site Alibaba.com, but this provided a mere 4 per cent boost.
During the third quarter, display ad revenues from Yahoo!-owned sites jumped 17 per cent, and display dollars are up 18 per cent over the year as a whole. The problem was search. Bartz said — as she's said before — that advertisers are holding back their search spending as they wait for Yahoo! to move its advertising back end onto Microsoft AdCenter. Bartz claimed that advertisers don't want to enter their campaigns twice: once on Yahoo! and once on Microsoft.
Bartz said the move to AdCenter will be completed this month.
Though Yahoo! is still working on the AdCenter switch, it has completed the switch to Bing, Microsoft's organic search platform. Because of this, Bartz claimed, users are clicking on fewer ads than they normally would. "When we transitioned to [Bing], results were so much better, users clicked on the top organic results more and clicked on paid ads less," she said.
Yahoo! CFO Tim Morse said this accounted for the majority of the difference between Yahoo!'s expected revenue and its actual revenue.
We do believe Yahoo! is a technology company. And we don't think it's in ruin. But that bit about better Bing results is beyond the pale. ®