Yahoo Q3 Profits Down 91 Per Cent

Yahoo has reported revenues of $1.2m (£0.8m) for Q3, 2013 in its latest quarterly results – a drop of five per cent year-on-year.

The companys net profit of $297m for the quarter was down 91 per cent on last year – though this figure included a $2.8bn gain related to the sale of its shares in Chinese tech company Alibaba Group. 

The 24 per cent stake Yahoo holds in Alibaba – which saw revenues of $1.8bn and $707m profit in Q2 – is key to its fortunes overall. It will have to sell a large chunk of its shares when Alibabas expected IPO takes place, though Yahoo announced that it has renegotiated this arrangement, reducing the number of shares it will have to sell from 261.5m to 208m.

In an earnings call following the results, Yahoo revealed that it currently has 800m monthly users on its core properties – a growth of 20 per cent since Marissa Mayer took over as CEO – nearly half of which come from mobile. In Q3, it had 390m monthly mobile users, up 15 per cent on the previous quarter.

Ad revenues

Display advertising accounted for $470m of revenues, down seven per cent year-on-year. While the number of ads sold grew by approximately one per cent, the price per ad dropped by seven per cent.

Search revenues were $435m for Q3. Again, a growth in usage (paid clicks were up 21 per cent) was offset by a drop in price-per-click (down four per cent) caused an overall drop in revenues, of eight per cent.

Yahoo doesnt currently break out mobile as part of its revenues, though in the earnings call, CFO Ken Goldman said that this part of the business “is growing quite rapidly”, and that we should expect to see mobile results in 2014.

“Clearly what’s driving our mobile business today is search,” Goldman said. “We do think that will drive our mobile business quite dramatically in 2014, but we’re also going to add display to that as well. But search in mobile is a very large opportunity and that is one of the things, we will be counting on as we really have mobile first kind of company here as we think about 2014.”