Yahoo Inc’s online ad prices slid again in the fourth quarter of last year, as Alibaba (阿里巴巴), the Chinese e-commerce giant in which it owns a big stake, saw its revenue growth decelerate from its recent rip-roaring pace in the same period.
Yahoo’s overall revenue fell 6 percent in the final three months of last year to US$1.266 billion, marking four consecutive quarters of decline. The company said that prices for its online display ads and its search ads slid in the fourth quarter.
Yahoo’s shares were down 3.7 percent at US$36.82 in after-hours trading on Tuesday.
“Normally, you get better pricing in Q4,” BGC Partners analyst Colin Gillis said. “The core business is shrinking.”
Since taking the helm in July 2012, Yahoo chief executive officer Marissa Mayer has moved aggressively to kickstart the company with product makeovers, acquisitions and big media hires, including celebrity newswoman Katie Couric.
Yet the Internet firm’s ad sales business continues to struggle at a time when rivals such as Google Inc, Facebook Inc and Twitter Inc are posting strong revenue growth.
Yahoo’s stock price has more than doubled since July 2012, but analysts say much of the gain is due to aggressive stock buybacks and the expected initial public offering of Alibaba, in which Yahoo owns a 24-percent stake.
Yahoo repurchased US$3.3 billion worth of its stock last year, the company said.
Its quarterly results also included some of Alibaba’s financial results from the third quarter.
The Chinese company’s revenue increased 51 percent year-over-year to US$1.776 billion. While still robust, that growth rate is slower than the 61 percent clip Alibaba delivered in the second quarter and the 71 percent growth rate seen in the first quarter.
“Alibaba was a big disappointment,” B Riley analyst Sameet Sinha said, adding that the Chinese firm’s cooling revenue growth raised questions about whether it is losing its competitive edge, or if some other factor might be the cause.
In a conference call with analysts on Tuesday, Mayer and finance chief Ken Goldman said they expect Yahoo’s revenue to begin to grow again this year, thanks to the past year’s investments and efforts in boosting traffic to Yahoo’s Web properties.
However, the search engine declined to provide a financial forecast for the full year, providing only an outlook for the current quarter.
Yahoo said that its net revenue, which excludes fees paid to third-party Web sites, would likely range between US$1.06 billion and US$1.1 billion in the first quarter, a range whose midpoint matched analyst’s average expectation of US$1.08 billion.
In the fourth quarter of last year, Yahoo’s revenue from display ads was down 6 percent annually, while its pricng per ad, excluding South Korea, declined 7 percent.
Yahoo’s fourth-quarter net income of US$348.2 million rose from the US$272.3 million it earned a year ago. Excluding certain items, Yahoo said it earned US$0.46 a share, beating analysts’ average expectation of US$0.38, according to Thomson Reuters I/B/E/S.
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