Yahoo said its loss in the second quarter widened to Dollars 440 million from USD 22 million a year earlier, while offering no definitive news on efforts to sell its core Internet business.
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Even excluding the Tumblr charge, costs would have risen about 9% despite Yahoo executives’ pledge to rein in costs. Yahoo has also said it could spin off the business. Analysts project earnings of $0.10 on revenue of $1.08 billion for the second quarter.
Yahoo also reduced its headcount by 2,100 employees compared to the same quarter of past year, to 8,800 in total. Tumblr though, did not meet Yahoo’s goal of $100 million in annual revenue, and is a glaring example of Mayer’s failure to turn around the company in her four years at the helm.
Bids for the core businesses of Yahoo Inc. are due Monday, and Quicken Loans founder and Chairman Dan Gilbert is among the potential buyers vying for the tech firm. IFP Advisors Inc increased its stake in Yahoo by 7.4% in the first quarter. On Monday, Mayer again said that the company was staying the course, “With the lowest cost structure and headcount in a decade, we continue to make solid progress against our 2016 plan”. Yahoo shares closed Friday at $37.72, down 0.6%, but up more than 3% for the last three months, parallel to Alibaba shares, which closed at $81.25, down 0.6% but also up almost 3% over the last three months.
Overall during the quarter, revenue rose 5.2% to $1.31 billion, helped by a change in how the company reports revenue. “Now the company can no longer pretend that Tumblr is today worth $1.1 billion”. Without that change, revenue would have declined 15 percent to $1.06 billion. Once touted in the halls of Yahoo’s Sunnyvale offices as a last hope, Mayer would instead be remembered for failing to bring Yahoo back from the brink with expensive ploys. Yahoo’s investment in Alibaba alone is now worth $US32 billion, before taxes. (NASDAQ:VZ) and a host of other private-equity firms have shown interest in Yahoo’s Internet assets earmarked for sale. Among the unresolved issues are Yahoo’s patents and real estate. “We could revisit our strategy, and that might happen naturally during the strategic alternatives process, but within products and services we now offer, we think this is approximately the right size overall for the company”, she said during the call.
Yahoo is in the process of auctioning off its search and advertising business and is expected to choose a victor this week.
“This is supposed to be the growth engine of the company, and at best it was up slightly year over year”.
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Yahoo is in the process of auctioning off its search and advertising business, and reports suggested that a final bidder would be picked on July 18. Her pay in 2015 was $35.9 million, representing a 14.5 percent drop from the Yahoo CEO’s compensation in 2014, but she’ll get a $55 million golden parachute if the company is sold.
