Yahoo suffers 28% drop in net income

Yahoo has reported first-quarter net income of $223m (£136.2m), down 28% year on year, after a 24% drop in revenue to $1.2bn, which the company blamed on the method it uses to account for its search tie-up with Microsoft.

Carol Bartz: CEO of Yahoo
Carol Bartz: CEO of Yahoo

Revenues fell 24% according to GAAP (generally accepted accounting principles), which are net of traffic acquisition costs.

Yahoo's revenue, excluding traffic acquisition costs, was down 6% to $1.1bn. Operating income rose 1% to $190m.

Revenue for markets where the search agreement has been effected – the US and Canada – is now reported on a net (after traffic acquisition costs) basis, rather than a gross basis.

Under the agreement, Microsoft retains a revenue share of 12% of the net search revenue generated on Yahoo properties and affiliated sites.

For markets that have not yet transitioned to the agreement, Yahoo reports revenue on a gross basis, with traffic acquisition costs included in the cost of revenue.

Carol Bartz, CEO of Yahoo, said: "We are solidly executing toward our plan for returning Yahoo to sustainable revenue and profit growth.

"During the quarter, we beat the midpoint of revenue guidance while continuing to deliver on the bottom line. We continued to extend our lead as the world’s premier digital media company, with users to Yahoo-branded properties increasing 15% year over year, and minutes spent increasing 17%."

The company expects its second-quarter revenue, excluding traffic acquisition costs, to be in the range of $1.075bn to $1.125bn, with Microsoft taking an approximate $35m share of revenue.

Subscribe to Campaign from just £57 per quarter

Includes the weekly magazine and quarterly Campaign IQ, plus unrestricted online access.

SUBSCRIBE

Looking for a new job?

Get the latest creative jobs in advertising, media, marketing and digital delivered directly to your inbox each day.

Create an Alert Now
Share

1 Grey London changes name to Valenstein & Fatt to promote diversity and tolerance

Grey London is making a statement against a recent surge in racism and nationalism by changing its name to Valenstein & Fatt, with the surnames of its two Jewish founders appearing above the agency's doors for 100 days.

Why Cosabella replaced its agency with AI and will never go back to humans
Shares0
Share

1 Why Cosabella replaced its agency with AI and will never go back to humans

In October, lingerie retailer Cosabella replaced its digital agency with an AI platform named "Albert". Since then it has more than tripled its ROI and increased its customer base by 30%.

Just published

More