In the first quarter since Marissa Mayer joined
the company as CEO, Yahoo reported dramatically improved profits, thanks to a
large asset sale. But revenue for the third quarter of 2012 fell 1% to $1.2
billion and income from operations fell 14% to $152 million from a year
earlier.
While
the stagnant earnings and declining operating profits highlighted some of the
challenges facing Yahoo in its struggle to regain momentum as a major Internet
company, shares were up 4.57% in early after-hours trading to $16.49 at 5 p.m. PT.
Earnings
per share grew to $2.64 and profits hit $3.2 billion thanks to a net gain of
$2.8 billion from the sale of shares in the Chinese internet company Alibaba.
The
earning call marked the first time that Mayer had presided over an earnings
call and the former Google executive used the event to outline in general terms
her strategic plans for the company.
During
her presentation, Mayer highlighted the importance of search, improved products
to drive usage, the need to attract top engineering talent, their plans to
modernize Yahoo mail and the importance of mobile.
"Mobile represents not only a
daily habit, but a fundamental and massive platform shift, a platform shift
that we have to ride and participate in, in order to be relevant," she argued.
"Today, there are more than 1 billion smartphone users globally. As expected,
that will double in the next 3 years. And while we've made progress, Yahoo
hasn't capitalized on the mobile opportunity. We haven't effectively optimized
our website, we've underinvested in our mobile front-end development and we've
splintered our brands. We have more than 76 applications across Android and
iOS."
"All
of this needs to change," she added. "Our top priority is a focused, coherent,
mobile strategy. We're accelerating our efforts to build a strong technical
talent base for mobile. This includes engineers, product managers and
designers."
Also
during the call, Mayer highlighted their efforts to strengthen their management
team, with the appointment of Henrique de Castro as chief operating officer;
Ken Goldman as chief financial officer; Ron Bell as general counsel; Jacqueline
Reses as executive vice president of people and development; and Kathy Savitt
as chief marketing officer.
