Yahoo posts 28 percent increase in earnings
By Hayley Tsukayama,
Yahoo is trading up after hours on the news that its earnings were up 28 percent, thanks in part to an increase in search revenue. The company reported revenue of $1.08 billion, slightly beating analyst estimates of $1.06 billion.
The results reflect well on the company’s new chief executive, Scott Thompson, who took over in February. Since then, the company has completely reshuffled its board and announced that it will lay off 2,000 employees.
In an announcement Tuesday, the company said it will reorganize into three main groups: consumer, technology and regions. The new structure, the company said, will bring “resources closer to users and advertisers.” The new structure, Thompson said in a statement, will also “quickly deliver the best user and advertiser experiences at scale.”
On the earnings call, Thompson said that he gathered the company’s top executives and asked what they would do if they were rebuilding the company from the ground up.
“Here was simple answer: Yahoo has been doing way to much for too long and was only doing a few things really well,” he said. “Dispersing the efforts of our best designers, developers and content producers ... initially put us in a great position, but that position isn’t sustainable.”
He said that while he regretted cutting jobs, he believes that the company had become bloated. Thompson said that the company will “get clear on our core business” and put customers first.
Thompson also addressed the company’s lawsuit with Facebook, saying that the social network must pay Yahoo licensing fees or change the way it does business. He also said, briefly, that the company is in discussions with Alibaba about Yahoo’s Asian assets, but declined to give further details.
On the call, Yahoo executives were cautiously optimistic, saying that the quarter was good but far from the company’s end goals. The company gave light guidance on its next quarter due to the impact of its reorganization and layoffs, the company’s chief financial officer, Tim Morse, said in a call with investors.
The company said it expects revenue to be somewhere between $1.03 billion and $1.14 billion.