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April 22, 2015

Mayer Stresses Need for Patience in Yahoo Turn-Around Strategy

Company Releases Uninspiring First Quarter Results

Yahoo CEO Marissa Mayer answers a question during a conference call with investors.

Yahoo posted less than stellar first quarter results, missing analysts’ revenue and profit forecasts and disappointing investors.

Fees paid to partner websites put a serious dent in Yahoo’s revenue, which fell from $1.09 billion to $1.04 billion. Net income dipped to $21.2 million, or two cents per share, from $311.6 million, or 29 cents per share, in the year-ago period. Adjusted earnings were 15 cents per share.

Wall Street had forecast a profit of 18 cents per share on revenue of $1.06 billion.

But CEO Marissa Mayer has a plan.

She told investors during a conference call that she planned to investigate options for the tech giant’s stake in its Japanese division.

She also talked about the importance of search and said it was a smart move for the company to invest in it.

“We do believe deeply in search,” Mayer said. “It’s deep in Yahoo’s DNA.”

During the webcast, Mayer emphasized the need for patience, pointing out she is only three years into a multi-year plan to turn Yahoo around.

“We know we have more to do, but with your support we will return this iconic company to greatness and growth, and we are closer than we’ve ever been to realizing that renaissance,” she said.

In a press release, she also stressed the need for investors to be patient.

“Yahoo is amidst a multi-year transformation to return an iconic company to greatness. This quarter, we saw encouraging revenue growth of eight percent, with display revenue growing a modest two percent and search growing 20 percent on a GAAP basis. Our mobile GAAP revenue reached $234 million in Q1, growing 61 percent year-over-year,” Mayer said. “We anticipated that we would grow GAAP revenue ahead of revenue ex-TAC and EBITDA, and that’s precisely what we saw this quarter. For the next phase of the transformation, we will focus on accelerating our GAAP revenue growth while managing our margins and costs.”


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Jennifer Cowan is the Managing Editor for SiteProNews.

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