Yahoo reported mobile revenue of $234 million for the quarter ended March 31, 2015 (Q1 2015), down 7.87% from $254 million in the previous quarter, but up 61.3% year-on-year (YoY) from $145 million. Mobile revenue represented 21% of Yahoo’s traffic driven revenue, up from 14% in the same quarter last year.
Overall, the company reported revenues of $1.23 billion for the quarter, up over 8% YoY from $1.13 billion in Q1 2014. However, revenue minus Traffic Acquisition Cost (TAC) stood at $1.04 billion, marginally down from $1.08 billion in the same quarter last year.
– Yahoo claimed that its search volume in Q1 2015 was at a five-year high, and attributed this growth primarily to the partnership between Yahoo and Mozilla. In the previous quarter, Yahoo had signed a five-year strategic partnership with Mozilla to become the default search engine on Mozilla’s Firefox desktop and mobile browsers.
– The company also amended its 6 year old search partnership with Microsoft “to improve the search experience, create value for advertisers and establish ongoing stability for partners.” Essentially the amendment will allow Yahoo to monetize up to 49% of its desktop search traffic through platforms other than Bing’s ad platform. However, Yahoo will continue to serve Bing ads and search results for at least 51% of its desktop search traffic.
– Launched the Yahoo Mobile Developer Suite comprising Flurry Analytics with Explorer, Yahoo App Publishing, Yahoo App Marketing, Yahoo Search in Apps, and Flurry Pulse. Readers will remember that Yahoo had completed the acquisition of the mobile app analytics & advertising firm Flurry, in Q3 2014.
– Integrated Audience Ads data into BrightRoll’s video demand side platform, providing video advertisers access to exclusive Yahoo audience data. Yahoo had closed the BrightRoll acquisition for around $640 million in cash, in the previous quarter.
– Yahoo India laid off over half of its editorial team based in Bangalore, in February this year. According to the source MediaNama spoke to, Yahoo India’s editorial team size has been reduced from 14 to 6. At one time, Yahoo India had an editorial team of 32, we were told. Last year, Yahoo had laid off around 300 employees from its software engineering department in Bangalore, India, because Mayer wanted to consolidate development operations in the US.
– Yahoo is also shutting down its office in Beijing, China, which is expected to result in over 300 job cuts. The layoffs were expected to begin at the end of last month.
Search revenue declines after 12 quarters
Search revenue ex-TAC was down 3% for the quarter, while the total search revenues grew by 20% to $532 million. This is Yahoo’s first decline quarter after 1 flat and 11 consecutive growth quarters. Note that search revenue from Mozilla traffic has been included on a gross basis, hence total search revenue has increased, but so has TAC.
Number of Paid Clicks increased 21% and Price-per-Click increased by 3%, as compared to Q1 2014.
Display revenues dips yet again
Display revenue ex-TAC has declined again to $381 million for the quarter, a 7% dip from $409 million in the same quarter last year. The total display revenue was up marginally by 2% to $464 million for the quarter, from $453 million in Q1 2014.
This is fourth straight quarter for Yahoo where display revenues (ex-TAC) has declined. In fact, display revenues (ex-TAC) has declined in eleven of the past 12 quarters, with the only exception being Q1 2014 where it grew by 2% YoY.
Number of ads sold increased by 29% approximately YoY while the price-per-ad declined by 17% YoY.
Revenues from the Asia Pacific region for Yahoo continues to decline: $160 million revenue during the quarter, down 8% from $174 million revenues in the same quarter last year. Including the traffic acquisition costs, the total revenue for the region was at $155 million for the quarter, down 9% from $172 million in the same quarter last year.
The region contributed for 11.5% of Yahoo’s total revenues (ex-TAC) for the quarter that was at $1.04 billion. In comparison, APAC region had contributed for 15.8% of Yahoo’s revenues in the same quarter last year and 15.3% of revenues in the previous quarter.
– Cashflow: As of March 31, 2015, Yahoo has $6.9 billion money in terms of cash, cash equivalents, and investments in marketable securities, as compared to $4.6 billion as of March 31, 2014.
– Share repurchase & icome tax liability: During Q1 2015, Yahoo repurchased around 4 million shares for $204 million, and satisfied the $3.3 billion income tax liability related to the sale of Alibaba Group ADSs in 2014.