Yahoo!'s profits rise 46% to US$331m

Net profit rose 46% from a year ago to US$331m, slightly better than expected, but revenues excluding payments to partners fell one percent to US$1.07bn, the Internet company said.

"I'm encouraged by Yahoo!'s performance in the second quarter. Our business saw continued stability, and we launched more products than ever before, introducing a significant new product almost every week," said Mayer.

Mayer cited the company's new Yahoo! News, the new Yahoo! Sports app, the redesigned Yahoo! search, the new Flickr, the new Yahoo! Mail for tablet, the Yahoo! Weather app, and the company's new Yahoo! app with Summly.

"This quarter drove tremendous improvements in our product line and our users responded with increased usage and engagement," she said. She said the quarter was "one of the most productive in the history of Yahoo!"

The company's strategy is based on "people and products, then traffic and revenue," she said, and that traffic is now growing again.

Buying spree

Mayer was hired from Google a year ago to help turn around the Internet pioneer, which had seen its fortunes fade.

Since she joined, Yahoo! has been on a buying spree, and has sold shares in China's Alibaba to boost its cash reserves.

Its most publicised deal was a billion-dollar acquisition of the blogging platform Tumblr, expected to help bring a younger audience to Yahoo!.

For its key advertising segments, however, Yahoo! saw its display revenues excluding partner payments fall 11% to US$423m, while search ad revenue on the same basis fell five percent to US$385m in the quarter.

"Fortunately for the still-new Marissa Mayer, Yahoo! is currently not being judged on its revenue growth as the company is shrinking some lines to focus on better earnings opportunities elsewhere," said Jon Ogg at 247 Wall Street.

"Yahoo! showed that it made nine acquisitions to strengthen its products, content, technology, and people," he said.

In a negative for Yahoo!, the company downgraded its outlook for revenues for the third quarter and the full year.

According to the research firm eMarketer, Yahoo! has failed to keep pace with rivals in advertising.

Despite seeing growth, Yahoo!'s share of global digital advertising spending is expected to decline to 3.1% in 2013 from 3.37% last year, eMarketer said, adding that Google and Facebook are grabbing a larger share of that market.

Source: AFP via I-Net Bridge