Mayer steadies Yahoo!’s ship, but needs to conquer the display ads wave

17 Jul 2013

Yahoo! CEO Marissa Mayer

Just a year into the CEO job and Marissa Mayer’s efforts to breathe life into internet portal (remember that word?) giant Yahoo! appear to be struggling, with a 12pc drop in display ad revenue and a 12pc decrease in ad prices signalling a tough transition.

Revenues were US$1.1bn for the second quarter, down 7pc from the same period last year.

However, net earnings were up 46pc on last year to US$331m while income from operations rose 150pc to US$137m, so Mayer has to be given credit for steadying the ship from an operational perspective.

The company also accelerated its pace of innovation in the second quarter, including re-imagined desktop, mobile and tablet versions of Mail, Weather, Flickr, Search, Sports, News, and Yahoo! for iPhone and Android.

While it has been suggested that Yahoo!’s decision to drop ad prices by 12pc is in response to its unpreparedness for automated ad buying, the company brought out new advertising formats, including Stream Ads and Billboard Ads designed to deliver news stream and richer content interactions respectively.

“I’m encouraged by Yahoo!’s performance in the second quarter. Our business saw continued stability, and we launched more products than ever before, introducing a significant new product almost every week,” said Mayer.

“From the new Yahoo! News, the new Yahoo! Sports app, the redesigned Yahoo! search, the new Flickr, the new Yahoo! Mail for tablet, the Yahoo! Weather app, our new Yahoo! app with Summly – this quarter drove tremendous improvements in our product line and our users responded with increased usage and engagement.”

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years