Yahoo Scales Heights On Earnings Report
A strong quarter for Yahoo returned revenue of $1.08 billion driven by the company’s strength in brand-name advertising, which offset softer returns on the paid search side of the business.
|Yahoo’s Earnings Climb Up|
Net income of $160 million for Yahoo delivered 11 cents in earnings per share. The numbers were in line with analyst estimates for the company’s first fiscal quarter of 2006.
“Yahoo! had another strong performance this quarter. Our overall advertising business saw solid growth and our user numbers continued to climb,” said Terry Semel, chairman and chief executive officer, Yahoo!
“We believe that our business model and our focus on exploring new opportunities in emerging areas has set us apart from the competition and has enabled us to offer our users the best online experience and our advertisers the most value online.”
Semel’s business model does seem to be working. Yahoo has been an aggressive, successful player in the brand advertising arena, and routinely wins the marketing business of powerful corporations.
Most recently, global retail power Wal-Mart has tapped Yahoo to help deliver a new marketing message about their business. Wal-Mart purchased the prime, top-right ad spot on Yahoo’s home page for one part of its revamped approach to bringing in consumers for more than just the low-cost staples that many people purchase regularly.
Another promotion on Yahoo’s main page links Yahoo’s Hotjobs search with NBC’s Donald Trump vehicle, “The Apprentice.” Entrants in that promotion can earn a chance to win $25,000.
To compete better against paid search power Google, Yahoo has to improve the relevance of its search advertising. Yahoo executives made that point in their Q4 2005 earnings statement, and recently launched a test of an improved algorithm as part of their initiative to serve their advertisements more effectively.
Yahoo’s chief financial officer, Susan Decker, made one point that could be of interest to company investors:
That could be a signal to Wall Street that Yahoo believes its shares have been undervalued by the market. Considering that Google trades at $404.24 as of press time, while Yahoo trades at $31.30 and is buying back shares while Google is issuing more, there may be something to that argument.
David Utter is a staff writer for WebProNews covering technology and business.