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TwitterContinuing the trend of positive Q4 results from Dupont and Google earlier in the week, Yahoo! (YHOO) today announced their financial figures for Q4 and the year 2009. Much to the joy of the investors and the relief of CEO Carol Bartz the numbers beat expectations by quite a good margin and restored a positive outlook for the new year.
The Sunnyvale, California based internet company reversed the direction of its revenue earnings from its southward trip for the past year and a half by posting a quarter to quarter gain of 10 percent or 1.73bn. The impressive results could not however prevent the drop in revenue for the same period of 2008. The revenue dropped 4 percent compared to Q4 08. The resulting profit of $153m will mean earnings of 15 cents per share beating the Wall Street analysts projection of 11cents per share. Looking at the operational side Yahoo! posted a $119m income for Q4 2009 compared to a loss of $278m for the same period of 2008. The numbers for the year 2009 also seemed promising as the annual net profit rose 43 percent to 598 million dollars while annual revenue fell 10 percent to 6.46 billion dollars.
The shares of the company closed at $15.99 after hitting an intra day high of $16.17, a gain of 0.82%.
Yahoo office building
The positives for Yahoo! from the result was that it seemed to have started getting positive results from its fixed ad business. The revenue from that stream grew by 26 percent compared to Q309 and was the biggest quarter to quarter jump since 2006. The company is trying to increase its share in the online ad revenue section and things seem to be going in their favor as the guaranteed premium placements nearly sold out, and as a result advertising interest in non-guaranteed ad spots went up as well. Despite the good showing in the advertisement area, Ms Bartz commented that they were going to pull up their socks as they had not done a very good job with the handling of user data in terms of interest based ad targeting.
The result also helped Carol Bartz breathe a sigh of relief as she completes her first year as the CEO of the company after moving from the same position which she held at Autodesk. She called her first year “wonderful but a bumpy ride”. She expressed satisfaction that despite the extremely difficult economic scenario Yahoo! had managed to scrape through with only a 10 percent drop in revenue. A result she termed as “pretty darn good…” given the circumstances.
After an eventful year for Yahoo! which involved a $47bn offer from Microsoft (MSFT) for an acquisition, which was turned down by the founder Jerry Yang. A move that got him a lot of criticism. Later in July, Yahoo! and Microsoft announced a 10 year web search and advertising partnership to counter their biggest competitor Google (GOOG).
Ms. Bartz commented that the strong showing of the last quarter was going to give them momentum to do well in the current year as well. After taking over she had enforced strict cost cutting measures and with the company’s position getting better they now plan to go down the acquisition road, though none of them will be very big ones. There are also hires planned in sales, marketing and product development. Advertising will continue to be the driving force and Yahoo! has planned several new products in the new year. There are also plans to exploit the market of upcoming internet users like Brazil, Indonesia and India etc.
Mobile marketing is an upcoming thing too and Yahoo! wants to ride that as well. Ms. Bartz claimed that Yahoo! had already signed up with am automotive major but did not divulge any details. Yahoo! customers can expect to have an indulging experience for users in finance, mail, fantasy sports and so forth. With android coming along as well the company wants to get a headstart in that area too.
The company plans to have three geographical divisions all of which would report to Ms Bartz and thereby not going down the path of finding a new head of international operations.
The gain in ad revenue is a very positive sign for the company and has been reflected by Google too in the results. Which way will the graph tip in the next quarter is too difficult to predict at the moment, Carol Bartz would hope its northwards. And that her Yahoo! moment continues.
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