Yahoo suffers 28% drop in net income

Yahoo has reported first-quarter net income of $223m (£136.2m), down 28% year on year, after a 24% drop in revenue to $1.2bn, which the company blamed on the method it uses to account for its search tie-up with Microsoft.

Carol Bartz: CEO of Yahoo
Carol Bartz: CEO of Yahoo

Revenues fell 24% according to GAAP (generally accepted accounting principles), which are net of traffic acquisition costs.

Yahoo's revenue, excluding traffic acquisition costs, was down 6% to $1.1bn. Operating income rose 1% to $190m.

Revenue for markets where the search agreement has been effected – the US and Canada – is now reported on a net (after traffic acquisition costs) basis, rather than a gross basis.

Under the agreement, Microsoft retains a revenue share of 12% of the net search revenue generated on Yahoo properties and affiliated sites.

For markets that have not yet transitioned to the agreement, Yahoo reports revenue on a gross basis, with traffic acquisition costs included in the cost of revenue.

Carol Bartz, CEO of Yahoo, said: "We are solidly executing toward our plan for returning Yahoo to sustainable revenue and profit growth.

"During the quarter, we beat the midpoint of revenue guidance while continuing to deliver on the bottom line. We continued to extend our lead as the world’s premier digital media company, with users to Yahoo-branded properties increasing 15% year over year, and minutes spent increasing 17%."

The company expects its second-quarter revenue, excluding traffic acquisition costs, to be in the range of $1.075bn to $1.125bn, with Microsoft taking an approximate $35m share of revenue.

Have your say...

Before commenting please read our rules for commenting on articles.

If you see a comment you find offensive, you can flag it as inappropriate. In the top right-hand corner of an individual comment, you will see 'flag as inappropriate'. Clicking this prompts us to review the comment. For further information see our rules for commenting on articles.

comments powered by Disqus
Media Week Jobs
Search for more media jobs

Latest

Williams promoted at ITV as Hazlitt departs

Williams promoted at ITV as Hazlitt departs

ITV has promoted Kelly Williams, the group commercial sales director, to managing director of commercial, as Fru Hazlitt steps down.

Share
Macmillan Cancer Support scoops Brand of the Year Award

Macmillan Cancer Support scoops Brand of the Year Award

Macmillan Cancer Support, one of the UK's leading and most admired cancer charities, was voted The Marketing Society's Brand of the Year at its annual dinner last night, in association with Marketing and Advertising Week Europe.

Share
Better Together
[Sponsored feature]

Better Together

With consumers making their own media choices, deserting the high street and finding out about brands on their own terms, agencies are wondering how to join up all the dots. Welcome to the interconnected world. By Stuart Derrick

Share

Get news by email