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Sep09 Call: Yahoo Display Ads; Campaign; Search Plans Post MS Deal; Pageviews

yahoo-cfo-tim-morse-smDuring the quarter ending September 30th 2009, Yahoo rolled out their new homepage, acquired Maktoob and Xoopit, and introduced updates to Yahoo Mail, Messenger and Mobile. Above all, following the game-changing search deal with Microsoft, the company launched a massive advertising campaign, focused on positioning Yahoo has a key consumer brand.

Yahoo CFO Tim Morse was quite pleased with the financial performance in the quarter, with revenues above guidance, and stabilizing after “two straight quarters of deceleration.” CEO Carol Bartz wasn’t on the call, and Morse reserved some comments, particularly related to operational performance, for Yahoo’s Analyst Day next week.

(Related: Sep09: Yahoo Net Profit Up 244% At $186M; Revenue Down 12%)

Some notes from the call:

Display Advertising & Impact Of Reducing Low Quality Ads: For display advertising, revenue from guaranteed placements grew in the mid single-digits sequentially because of better yield, while the non-guaranteed placement revenue declined sequentially, due to “ad quality initiatives” undertaken by Yahoo during the quarter, wherein Yahoo reduced the number of low quality ads that it runs in order to improve its user experience. Morse said that the the initiatives had a lesser downward impact on revenues than anticipated.

— Microsoft Search Deal: Yahoo isn’t exiting search, Morse said. The agreement will allow Yahoo to innovate on the search experience on top of the results generated by Microsoft, Morse said, adding that it isn’t about the algorithm that provides results, but it’s also about a more personally relevant search experience. (ED: I wonder if we’ll see a variation of Glue Pages as one such innovation). Yahoo expects the transaction to be closed in early 2010, following which two major markets will be migrated to Microsoft next year, and the rest the year after.

— Pageviews: were up 5% year on year, with the homepage being up in double digits, and mail up as well. Not all US users have changed the homepage, but the new homepage has been rolled out in 7 countries. However, there was a negative impact with Yahoo 360 and Geocities being closed. Usage of key properties, including sports, grew.

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— Yahoo Mobile: Yahoo is on 1900 devices, five times more than in April 2009. They’ve launched iPhone apps, Finance, Flickr etc. Yahoo mobile has 35 million users in the US.

— Revenue Per Search slightly down, while search queries increased.

— Yahoo invested around $18 million in their branding campaign which began during the last week of the quarter. The biggest increase in the brand campaign spend will be in Q4.

— The company reported a $98 million pre-tax gain from their sale in Alibaba.com, but does not have plans to exit Alibaba or Yahoo Japan.

— Yahoo hired in product and sales during the quarter.

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