Little to cheer about in Yahoo’s latest financial report

In presenting their first earnings report since taking over the top jobs at Yahoo Inc. last month, CEO Jerry Yang and president Sue Decker could do little more than promise to try harder—while lowering expectations of any immediate turnaround at the No. 2 search engine.

“I am focused on doing everything we need to do to strengthen our business,” Yang said. “We are operating with a great sense of urgency,” added Decker.

Yahoo’s results were in line with those of recent quarters: relatively low revenue growth when compared with search powerhouse Google and the sixth consecutive quarter of net income that was lower than the previous year’s quarter.

Revenue for the second quarter was $1.70 billion, up 8% from $1.58 billion in Q2 2006. After subtracting commissions paid to online advertising partners, Yahoo’s revenue was $1.24 billion in the quarter, an increase of nearly 11% from $1.12 billion last year. Net income was $161 million, down nearly 2% from $164 million a year ago.

The company also reduced its projections for full-year revenue from a range of $4.95 billion to $5.45 billion to between $4.89 and $5.19 billion. Yahoo shares traded down 5% today.

Yang, one of Yahoo’s founders, took over as CEO last month from Terry Semel, who had been unable to keep Yahoo from falling further behind Google in online search. In the most recent report from Nielsen/NetRatings, Google accounted for 56.3% of U.S. searches in May and was growing much more rapidly than Yahoo, which had 21.5% of searches.

Another Internet traffic-measurement service, comScore, reported that Google sites accounted for 49.5% of U.S. searches in June, compared with 25.1% for Yahoo. Both of the top search engines lost just over 1% of market share from May to Microsoft, which moved up from 10.3% in May to 13.2% in June. That stemmed from Microsoft’s launch of its Live Search Club in late May, which rewards users of its service, comScore says.

Despite steadily losing ground to Google, Yahoo remains a formidable Internet presence. Yahoo sites attracted 133.1 million unique visitors to top comScore’s June rankings of U.S. Internet properties, with Google sites second at 123.6 million.