It may be a long road back for Sunnyvale based Yahoo!, with new CEO Marissa Mayer at the helm, but what should we read in to the market reaction as the internet search company unveils its first quarter earnings this morning. Two key elements disappointed analysts; search revenue, banner and video advertising lower than expected and next quarter projections about 8% lower than analysts were looking for, and yet, only moderate pre-market selling and already Yahoo! shares up on the day at $23.98. And it was a progressive quarter in other ways, as Yahoo! announced acquisitions like, Snip.it, Alike, and Jybe – it was also the quarter where they announced the well publicised but somewhat mysterious acquisition of Summly.
Not a bad quarter – and certainly not, as bad as the LA Times told us within the last hour, “Yahoo shares plunge…” In fact, investors are not running scared, as I write, Yahoo!’s share-price is up 0.5%. So what can we draw from today’s results?
- Yahoo! continue to focus on mobile technology acquisitions – moving its focus to mobile. I believe absolutely the correct strategy – the browser as we know it, is dead.
- Look out in the next quarter for Yahoo! to address its non-core markets – Google has it all its own way in most European countries and many other regions. Yahoo! will no doubt start to pick off acquisitions around the globe – $5 – $50 million targets with smart people and smart tech.
- Marissa Mayer is undoubtedly a capable CEO and the market, and industry watchers want her to succeed but will the market wait another quarter for signs of recovery? Yes certainly, probably two. Yahoo!’s a big ship to turn – and investors will wait a while more.
Revenue was $1,140 million for the first quarter of 2013, a 7 percent decrease from the first quarter of 2012. Revenue excluding traffic acquisition costs (“revenue ex-TAC”) was $1,074 million for the first quarter of 2013, flat compared to the first quarter of 2012.
Adjusted EBITDA for the first quarter of 2013 was $386 million, flat compared to the same period of 2012.
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