Yahoo! issued its Q3 06 earnings today and the numbers weren’t pretty, but the Internet giant had already warned everybody this might be the case.
| Yahoo Selected Financial Data (000s) | |||||
| Q305 | Q405 | Q106 | Q206 | Q306 | |
| Revenues | $ 1,329,929 | $ 1,501,000 | $ 1,567,000 | $ 1,575,854 | $ 1,580,322 |
| Total operating expenses | $ 539,634 | $ 599,166 | $ 707,900 | $ 700,500 | $ 696,862 |
| Income from operations | $ 270,057 | $ 328,948 | $ 201,212 | $ 229,587 | $ 202,340 |
| Net income | $ 253,773 | $ 683,208 | $ 159,859 | $ 164,300 | $ 158,529 |
While revenues rose 19% year-over-year to $1.58 billion, they barely rose (up only .3%) sequentially. Net income dropped 38% year-over-year, and 3.9% sequentially, to $158.5 million.
“While we are tremendously excited about many things happening at Yahoo!, we are not satisfied with our third quarter financial performance,” CEO Terry Semel said during the company’s earnings call. The good news is that Yahoo!’s long-delayed search advertising platform, Project Panama, or at least its front-end, is live as of today, with advertisers already using it.
Yahoo!’s difficulties in embracing graphical advertising will be aided by two deals announced today, Semel said. First, Yahoo has a deal to purchase rich media advertising company AdInterax. Secondly, Yahoo! is a strategic investor in online advertising exchange start-up Right Media.
No word on the talks between Yahoo! and Facebook, but Semel did emphasize that Yahoo! already has tested the social media waters with Flickr, Yahoo! Answers, del.icio.us and Yahoo Video. “We’re a far bigger player in this space than many people realize,” Semel said, noting that the four social-ish media properties combined currently lay claim to 100 million users per month.
Regarding another growth category, video, Semel said that “our goal is to make video as ubiquitous as text throughout Yahoo” through partnerships, such as the local news distribution deal with CBS announced yesterday, as well as original content creation.
Finally, Yahoo plans to ramp up its mobile efforts to the point where “Yahoo! Go and other services will be available to the majority of phones in the world in the next 18 months,” Semel predicted.
Despite these hopes, Yahoo! dampened expectations for Q4 06, saying that revenue will range from $1.15 billion to $1.27 billion, down slightly from analysts’ expecations and off from the $1.58 billion posted for Q3 06.
Cynthia Brumfield at 5:25 PM|Comments(0)
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