With an 8% decline in display advertising revenue and a 19% drop in search advertising revenue, Yahoo Inc. has reported that its marketing services revenues dropped 15% in the third quarter ended Sept. 30, to $851 million from $1 billion.
Yahoo also reported:
- Overall revenue for the third quarter fell to $1.58 billion, down 12% from $1.79 billion a year ago.
- After subtracting commissions paid to online advertising partners, Yahoo’s revenue was $1.13 billion, down 15% from $1.33 billion a year ago.
- Net income jumped to $187.8 million from $56.2 million a year ago due to job cuts and a one-time boost from the sale of a noncore business.
While year-over-year revenue continued to decline, it was flat compared to Q2’s revenue of $1.57 billion. That’s why the third quarter’s theme was stabilization, said Yahoo chief financial officer Tim Morse in a conference call with analysts. “We saw strength in key areas of our business after two straight quarters of deceleration.”
Next week Yahoo plans to update analysts on developments in their July agreement with Microsoft Corp. to make Microsoft’s Bing the search engine on Yahoo sites. The transaction remains scheduled to close early next year, said Morse.
The agreement does not mean Yahoo is exiting search, said Morse. “Not only will our agreement allow us to continue to generate search revenue but more importantly we’ll continue to innovate in the search experience,” he said. “The next revolution isn’t with the algorithms that provide results, it’s in creating a better, more personally relevant search experience. This is where we’ll differentiate ourselves and compete vigorously without the billions required to keep up in the arms race that generating search results has become.”
The company is forecasting fourth-quarter revenue of between $1.6 billion and $1.7 billion, after subtracting commissions paid to online advertising partners.
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