Yahoo reported a net profit attributable to the company of $76.3-million (U.S.), or 8 cents per share, for the third quarter ended September 30, compared with a profit of $6.77-billion, or $6.70 per share, a year earlier.
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Revenue in that area rose 43 percent to $422 million in the quarter.
Yahoo’s deal with Google, then, is its latest Hail Mary and CEO Marrisa Mayer’s latest attempt to turn the company around.
One notable partnership in the quarter was Yahoo’s deal with Google in October, which would allow the company additional flexibility to choose among suppliers of search results and ads. “As we move into 2016, we will work to narrow our strategy, focusing on fewer products with higher quality to achieve improved growth and profitability”.
By generally accepted accounting principles, search revenue came in at $509 million for the third quarter of 2015, up 13%, compared with the year-ago quarter. The stock is back down again, after slides from tonight’s conference call have slipped out, showing that the company projects revenue of $920 million to $960 million, below consensus for $1.076 billion. Analysts had been expecting earnings of 17 cents per share on revenue of $1.26 billion. Google will now earn a percentage of revenue harvested from ads displayed on the Yahoo site, Reuters reports.
Through Tuesday’s close of $32.83, Yahoo’s shares had lost 35 percent this year.
Mayer said search remains an important part of Yahoo!’s investment, however, and that the company will push forward with investment in its own platform for search ads, “Gemini”.
Ms Mayer, in her fourth year as chief executive, said the forecast was “not indicative of the performance we want”. That sale suffered a setback last month when the Internal Revenue Service rejected the company’s tax-free sales plan. However, the company missed analyst forecasts for overall revenue and earnings per share.
“I’m personally not sure Yahoo has many CEO changes left”, said Kartik Hosanagar, a Wharton School professor who follows the digital economy. The Services Agreement is non-exclusive and expressly permits Yahoo to use any other search advertising services, including its own service, the services of Microsoft Corp.
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Yahoo said the proposed spinoff of its 15 percent stake in Chinese e-commerce giant Alibaba Group Holding – a key matter for shareholders – will go through in January.
