Yahoo Inc is still limping along as the Internet company prepares to shed the financial crutch that has been propping up its stock during the three-year reign of chief executive Marissa Mayer.
The latest evidence of the challenges facing Mayer emerged on Tuesday with the release of Yahoo’s second-quarter earnings report. Yahoo posted a nearly US$22 million loss, driven by soaring ad commission paid to its partners, while its net revenue remained unchanged from the previous year at US$1.04 billion.
If not for the costs of employee stock compensation and one-time accounting items, Yahoo said it would have earned US$0.16 per share. That figure was US$0.02 per share below the average estimate among analysts polled by Zacks.
Yahoo’s stock fell US$0.55, or 1.4 percent, to US$39.18 in extended trading after the numbers came out.
Investors focus on Yahoo’s net revenue because it reflects how much money the company keeps after paying its ad commissions, also known as “traffic acquisition costs.”
Yahoo has been dogged by a lack of net revenue growth since 2008, and the pattern has persisted since Mayer’s arrival in July 2012.
Even though the volume of Internet advertising has been steadily rising during that stretch, Yahoo’s revenue has been backpedaling while rivals such as Google Inc and Facebook Inc have been sprinting further ahead in the race for Web surfers’ attention and marketing dollars.
The Sunnyvale, California, company predicted its net revenue would decline once again in the current quarter ending in September.
Mayer said on Tuesday she remains confident Yahoo’s net revenue would begin climbing again as the company reaps the benefits from its recent emphasis on mobile applications, advertising and search.
“Yahoo’s transformation is well under way and overall I am very pleased with our progress,” Mayer said.
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