Yahoo reported Q4 2013 earnings. Here are the top and bottom lines:
- Revenues ex-TAC: declined 2% to $1.2 billion.
- Earnings per share: 46 cents.
- Full year 2013 revenue: $4.68 billion, down 6%.
That's a huge beat on the bottom line. The stock rose 1.4% after hours but then immediately declined nearly 6% when it emerged that Yahoo's display ad business had gotten smaller again — this time by 6%.
But Yahoo is still contracting as a company. Here are the topline revenues over time:
The mix of ad prices to total ads sold is hurting Yahoo over time, with search performing better than display:
CEO Marissa Mayer glossed over her shrinking media sales business and asked investors to focus on the traffic increases:
"I'm encouraged by Yahoo's performance in Q4 and 2013 overall. We saw continued stability in the business, and our investments allowed us to bring beautiful products to our users and establish a strong foundation for revenue growth ... We are extremely heartened by the year-over-year traffic increase we experienced in 2013, an early sign of return on our investments and the acquisitions we've made."
Once again, Yahoo's display ad business withered while its search ad business picked up the slack:
- Display revenue ex-TAC [traffic acquisition costs] was $491 million for the fourth quarter of 2013, a 6 percent decrease compared to $520 million for the fourth quarter of 2012. Display revenue ex-TAC was $1,737 million for the full year of 2013, a 9 percent decrease compared to $1,899 million for the prior year.
- Search revenue ex-TAC was $461 million for the fourth quarter of 2013, an 8 percent increase compared to $427 million for the fourth quarter of 2012. Search revenue ex-TAC was $1,699 million for the full year of 2013, a 6 percent increase compared to $1,611 million for the prior year.
Here is the full earnings release.
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Here's what analysts were predicting prior to the release:
- Revenues: $1.2 billion.
- Earnings per share: 38 cents.
The call at 5 p.m. EST comes after these recent events at the company:
COO Henrique De Castro left after little more than a year on the job, and exited with a $109 million pay package. He was CEO Marissa Mayer's first major hire, and first major error in judgment. Yahoo currently does not have a chief revenue officer, as a result.
Mayer has been diligently acquiring and launching a suite of new apps to transform Yahoo into a mobile media company. David Pogue now runs Yahoo Tech, Nick D'Aloisio runs the Yahoo News Digest app, and the company acquired Aviate, a mobile app search and organization division.
But analysts are focused on two things: Any signs of growth in the online advertising business, and the state of Yahoo's investment stakes in the Chinese trading site Alibaba and Yahoo Japan. Those holdings are mostly responsible for the recent increase in Yahoo's stock.
It would also be nice to see some revenue attached to Tumblr, its most spectacular acquisition of the past couple of years.