Yahoo beats Wall Street estimates but display ads decline

Yahoo on Tuesday reported
revenue of $1.27 billion and
non-GAAP earnings of $.46
per share for the fourth
quarter of 2013. The company
beat Wall Street's
expectations of $1.2 billion in
revenue, and its non-GAAP
estimate of $.38 per share.
The lumbering technology
giant is of course in the midst
of an attempted turnaround,
and its stock has largely been
goosed by Yahoo's 24
percent stake in Chinese e-
commerce company Alibaba,
which is on its way to a
highly anticipated IPO.
Chief executive Marissa Mayer
has at least made the
company relevant again. The
company has an increasingly
big media bent, bringing on
high profile names like Katie
Couric and David Pogue.
She's also put the company
on a steady diet of
acquisitions, and focused the
operation on mobile apps.
The company has released
weather and news apps that
have been well received for
their mobile design. Of
course, the money spent on
Yahoo's well-documented
acquisition spree adds up,
and the company reported
cash balance of $5 billion,
down from $6 billion a year
ago.
But what hasn't yet translated
is ad monetization, even with
some glossy new properties.
In 2013, Yahoo lost its spot
as the No. 2 digital ad seller
in the United States behind
Google, when Facebook took
its position for the first time,
according to the research firm
eMarketer. Also according to
the firm, Yahoo had a share of
about $1.27 billion, or 7.2
percent, of total U.S. display
ad revenues in 2013. On
Tuesday, Yahoo reported
GAAP display revenues of
$553 million, a 6 percent
decline from the same quarter
last year.
At the Consumer Electronic
Show earlier this Month,
Mayer introduced a new
advertising exchange to
consolidate its ad offerings,
though we obviously won't
yet be able to see if the
change bears fruit until it has
been on the market for a
longer time.
"I'm encouraged by Yahoo's
performance in Q4 and 2013
overall," Mayer said in the
report. While not focusing on
sales or ads, she instead
drew attention to the year's
increase in traffic and new
product releases.
On the company's video
conference call, Mayer spoke
of a chain reaction plan for a
multi-year turnaround:
people, products, traffic,
revenue. She said the
company has laid the
groundwork with the first
three terms, which will then
lead to revenue. Finance chief
Ken Goldman echoed the
sentiment saying revenue
growth is the number one
goal.