Yahoo profits rise, but decrease in revenues indicate continuing trouble
By Glenn Chapman, AFP
January 30, 2014, 12:25 am TWN
SAN FRANCISCO--Yahoo reported on Tuesday that its quarterly profit jumped at the end of last year, but revenues sank in a troubling sign for the struggling Internet pioneer.
The California firm reported profit up 28 percent to US$348 million in the fourth quarter on revenue that slid six percent to US$1.27 billion from the same period a year earlier.
Yahoo shares dropped to US$36.87 in after-market trades, despite chief executive Marissa Mayer's insistence that the company is on the right path.
"I'm encouraged by Yahoo's performance in the fourth quarter and 2013 overall," she said.
"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."
Yahoo took in US$70 million selling some of its patents and saw healthy returns on its investment in Chinese e-commerce giant Alibaba.
"Most of their money seems to be still coming in from China, which is outside Mayer's control," said independent analyst Rob Enderle of Enderle Group in Silicon Valley.
A former Google executive, Mayer has been striving to revitalize the once-leading online search engine vanquished by the company she left behind.
Investors were troubled by a six percent drop during the fourth quarter in display ad revenue that has long been at the core of Yahoo's income.
Display ad revenue in the quarter was US$491 million compared to US$520 million taken in during the final three months of the previous year, according to the earnings release.
For the full year 2013, Yahoo posted a profit of US$1.4 billion, which was down from 2012 when the company took in big sums from sales of its stake in China's Alibaba.