Yahoo is regaining its appeal among investors a lot faster than with the online advertisers who generate most of its revenue.
The company’s third-quarter numbers released on Tuesday are the latest to underscore the challenges facing CEO Marissa Mayer even as Yahoo’s stock continues to soar under her leadership.
The shares have more than doubled since Yahoo lured Mayer away from rival Google Inc 15 months ago, largely because investors prize Yahoo’s 24 percent stake in Chinese Internet star Alibaba Group Holding (阿里巴巴).
Alibaba is already making far more money than Yahoo, while growing at a rapid pace that bodes well for the future.
Meanwhile, Yahoo Inc is still struggling to revive its revenue growth even though advertisers are spending more on online ads. Most of that money, though, is flowing to search leader Google and social networking leader Facebook Inc.
Yahoo’s revenue slipped in the three months ending September as the company saw declines in two advertising categories. It sold fewer display ads and fetched lower prices, and although the text ads next to the search results on Yahoo’s Web site drew more clicks, the amount of money marketers paid for those commercial pitches declined.
The Sunnyvale, California company earned US$297 million, or US$0.28 per share, in the third quarter. That is a 91 percent drop from nearly US$3.2 billion, or US$2.64 per share, at the same time last year.
It was not an apple-to-apple comparison because last year’s profit was lifted by a US$2.8 billion windfall from Yahoo’s sale of part of its stake in Alibaba.
Revenue fell 5 percent from last year to US$1.1 billion during the recent quarter. After subtracting ad commissions, Yahoo’s revenue stood at US$1.08 million to match analyst projections.
Yahoo’s stock dipped US$0.26 to US$33.12 in extended trading after the results came out.
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