Feeds

Yahoo! blames quarterly tumble on Microsoft search pact

Not what we earn, how we report it

The Power of One Infographic

Yahoo! reported a drop in revenue and sales for the first quarter, blaming the mechanics of reporting its search pact with Microsoft for the fall.

GAAP sales fell 24 per cent to $1.21bn, compared with the same period in 2010. Net income fell 28 per cent to $223m while earnings per share were down 23 per cent to $0.17.

The company on Tuesday also reported revenue excluding Traffic Acquisition Costs (TAC) was down 6 per cent to $1.06b for the first three months.

In both cases Yahoo! said the declines were in part due to how it recognizes revenue from Microsoft. The falls, Yahoo!, said were:

"Primarily due to the required change in revenue presentation related to the Search Agreement and the associated revenue share with Microsoft. For transitioned markets (U.S. and Canada), Yahoo! now reports revenue associated with the Search Agreement on a net (after TAC) basis rather than a gross basis."

The first-quarter results include $56m in search operating cost reimbursements and $11m in transition cost reimbursements from Microsoft under the companies' search agreement that sees Yahoo!'s web properties swap over to Microsoft's Bing search and advertising platform. Yahoo! noted search operating cost reimbursements would decline as its properties complete the transition.

Chief executive Carol Bartz said in a statement: "We are solidly executing toward our plan for returning Yahoo! to sustainable revenue and profit growth."

Boost IT visibility and business value

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
Nadella: Apps must run on ALL WINDOWS – on PCs, slabs and mobes
Phone egg, meet desktop chicken - your mother
ITC: Seagate and LSI can infringe Realtek patents because Realtek isn't in the US
Land of the (get off scot) free, when it's a foreign owner
HP and Microsoft prove it again: Big Business Doesn't Create Jobs
SMEs get lip service - what they need is dinner at the Club
Samsung threatens to cut ties with supplier over child labour allegations
Vows to uphold 'zero tolerance' policy on underage workers
Dude, you're getting a Dell – with BITCOIN: IT giant slurps cryptocash
1. Buy PC with Bitcoin. 2. Mine more coins. 3. Goto step 1
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
prev story

Whitepapers

Seven Steps to Software Security
Seven practical steps you can begin to take today to secure your applications and prevent the damages a successful cyber-attack can cause.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.
Consolidation: the foundation for IT and business transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.