In the quarter where Yahoo made nine acquisitions including Tumblr, it has reported a net profit of $331 million for the quarter ending May 30, 2013, up 46% from $226 million profit in the same quarter last year.
The company posted revenue excluding traffic acquisition costs (Revenue ex-TAC) of $1.07 billion for the quarter ending May 30, 2013, a marginal 1% dip from $1.08 billion in the same quarter last year. The total revenue was at $1.14 billion for the quarter, a 7% dip from $1.22 billion revenues in Q2 2012.
– Yahoo announced two new ad formats aimed at providing an improved content experience to users. The ad formats include Yahoo Stream ads which features native ads in form of sponsored content between its news feed articles and a new Yahoo.com Billboard ad which aims to offer richer content interaction to users. For instance, a movie trailer can provide additional information about the film and also showcase links to buy movie tickets directly from the ad.
– Yahoo is providing users with additional content as part of its partnerships with ABC News, CNBC and Condé Nast Entertainment. It also announced a partnership with Broadway Video Entertainment and NBC Entertainment, to offer archival clips from the “Saturday Night Live” show from 1975 to 2013 exclusively on its portal.
– Acquisitions: During the quarter, Yahoo made nine acquisitions to strengthen its products, content offerings, technology and talent. These include Tumblr, Summly, Astrid, Milewise, Loki Studios, Go Poll Go, PlayerScale, Rondee and Ghostbird Software.
While the remaining apps were shut down (or are shutting down shortly), Yahoo had informed that Tumblr will independently operate as a separate business and Tumblr’s Founder David Karp will remain CEO of the company. The company informed that it used a net $1 billion in cash for acquisitions, which includes a net $970 million for Tumblr acquisition.
– In April 2013, Yahoo shut down six services including Upcoming, Yahoo SMS Alerts and Yahoo Mail & Messenger apps J2ME apps among others. Last month, it also shut down Yahoo Stars India and 11 other services including AltaVista, Yahoo Axis, Yahoo RSS alerts and Yahoo Local API among others.
Display Revenues Down 12%
Yahoo reported a decline in its display revenues for the quarter – posting a display revenue of $472 million for the quarter, down 12% from $535 million in the same quarter last year. Excluding the traffic acquisition costs, the display revenue was at $423 million for the quarter, a 11% dip from $473 million in Q2 2012.
The number of ads sold decreased by 2% year-on-year (YoY) during the quarter while the price per ad decreased by 12% YoY. Note that these revenues exclude the revenues generated in Korea market due to the closure of Korea business in Q4 2012.
Search Revenues Down 10%
Yahoo reported a decline in search revenues as well – posting search revenues of $418 million for the quarter, down 9% from $461 million revenues in the same quarter last year. Excluding the traffic acquisition costs, the search revenues was at $403 million for the quarter, down 5% from $385 million revenues in Q2 2012.
Paid clicks increased approximately by 21% YoY during the quarter while price per click decreased approximately by 8% YoY. Note that these revenues also exclude the revenues generated in Korea market due to the closure of Korea business in Q4 2012.
Yahoo has reported Asia Pacific revenues excluding traffic acquisition costs (Revenue ex-TAC) of $193.5 million for the quarter, down 8.29% from $211 million in the same quarter last year. The total revenue was at $209.3 million for the quarter, down 21.87% from $267.9 million in Q2 2012. APAC region accounted for 19% of Yahoo’s total revenues for the quarter.
During the quarter, Yahoo repurchased 25 million shares for $653 million. This was offset by a $846 million cash payment from Alibaba group to redeem the Alibaba Group Preference Shares. Yahoo CFO Ken Goldman informed that they have now essentially completed its commitment to return $3.65 billion from the Alibaba Group proceeds to its shareholders, repurchasing a total of 190 million shares.
Goldman also noted that they continue to carry out the $5 billion share buyback which was authorized last year, of which around $1.9 billion remains as of now. The company plans to repurchase these shares in open market or privately negotiated transactions.