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Yahoo Q1 just beats Wall Street, mobile and “Mavens” grow, search and display down
In the midst of the drama over who’s going to buy Yahoo the company reported Q1 2016 earnings today. Results were somewhat better than Wall Street analyst consensus estimates. Total revenue was $1.08 billion, down from $1.23 billion a year ago and off 11 percent year over year.
The company broke out its “MaVeNS” (mobile, video, native, social) and mobile revenue, both of which grew compared with a year ago (7 percent and 11 percent respectively). Separately reporting these categories has been a way to tell a growth story in the midst of declining core display revenue. However, native display revenue was a particular bright spot, with 28 percent growth year-over-year.
Paid search clicks were down 21 percent but prices increased 7 percent compared to the first quarter of 2015. Overall search revenue was down 15 percent to $820 million. Display ad sales were up but revenue was down slightly to $463 million vs $467 million a year ago.
In a prepared statement Yahoo CEO Marissa Mayer said that the company had made “substantial progress towards potential strategic alternatives for Yahoo” (read: sale). Beyond Private Equity, Verizon and YP, we don’t know exactly who submitted acquisition bids for the company yesterday. That will undoubtedly come out in the next week or so.
On the previous earnings call, Mayer announced significant layoffs and a restructuring plan aimed at streamlining and focusing the company’s efforts on core areas of strength. Mayer also said last time that 2016 would be a transition year in which revenues and earnings are likely to decline, “with growth returning in 2017.”
Yahoo’s core business weakness and its declining display and search revenue represent a challenge for any buyer. Analysts suggested that Yahoo might be sold for between $4 and $8 billion. In 2008 Microsoft unsuccessfully tried to buy Yahoo for roughly $45 billion.
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