Yahoo Looks for Positives in Weak Q3 Numbers
Yahoo reported another weak quarter, with key metrics about its search and display advertising businesses performing poorly.
Still, shares were up 3.3 percent, or 51 cents, on news that it had topped expectations.
In Q3, the Internet search giant said profits had slipped and revenues dropped — the fall just wasn’t as steep as analysts had anticipated.
As this was the first quarter since Carol Bartz’s firing, analysts will have plenty to ask about, from the company’s search for a full-time CEO to its potential sale. Today will be a busy call.
Since our in-house Yahoo aficionado Kara Swisher is in Hong Kong, where Yahoo’s Jerry Yang will be appearing at our own AsiaD conference on Thursday, I’ll be helping her out today by covering the call.
While there’s no replacing Kara, here’s my best interpretation of her liveblog style:
2:01 pm: Here we go, time to get started after all of the standard regulatory warnings.
We are pleased that the results exceeded expectations, says interim CEO Tim Morse.
The board is looking for all options to return to robust growth, and to create value for employees, users and shareholders. Also, when the board has something to say, it will do so. It will not be today and not on this call. This call will focus on third-quarter results and fourth-quarter guidance.
Darn, if only Kara were here, she’d have something snarky to say about that.
Perhaps this call will be shorter than we thought.
Typically, Morse, who was CFO, is doing double duty by also going through all the numbers.
2:15 pm: Sorry, a few technical difficulties. After a very thorough review of the business, it’s been turned over to Q&A.
Morse already warned analysts that he wasn’t going to address any hot topics, so don’t expect any fireworks.
Morse says attrition is lower as we went through the quarter, and headcount stabilized. According to the company, it ended the third quarter with 13,700 employees — or 400 fewer employees — than a year ago.
Not to mention Kara’s exclusive scoop earlier this week that Raymie Stata stepped down as CTO.
2:20 pm: Zipping through all these questions on Microsoft partnership and the state of the display industry and how Yahoo is reorganizing its sales force.
Kara would definitely consider this the norm. Analysts haven’t asked about anything related to questions surrounding the board, the CEO search or a sale — at least not yet.
Once again, having some audio difficulties.
2:27 pm: Morse is feeling a little bullish about how some of the things they’ve been talking about over the past two years are coming to fruition. In particular, he’s speaking a lot about an “anchors and tent pole” approach, which is working.
In response to a question about some of Yahoo’s growth opportunities, Morse actually uses the b-word.
“We really are quite bullish on where we can take some of the investment areas. As we go forward, the goal is to balance growth opportunities and cost efficiencies. The cost structure is right on track, so it’s largely focused on revenue growth.”
Finally, a good question: So, why did the board fire Carol if you were on track to exceed consensus?
Morse: “We are pleased to exceed consensus. All I can say is, the board’s process is the board’s process.”
Here’s another relevant question from an analyst: How’s the CEO search going?
No comment, essentially. “On the CEO search, all I can tell you is that it’s under way and that’s the board process.”
2:37 pm: Next question, please!
Another question that is getting to the heart of the matter: When will the board communicate its decisions about the future of the company? I think a lot of folks would be interested in knowing if and when some of these things will be resolved.
Morse draws from his opening comments: “This will take some time. The board wants to do what’s best for the company, and it will take some time. … That’s my only comment on it.”
2:43 pm: Isn’t anyone following instructions? Only one question each, and that last guy just asked five boring ones.
Next question, please!
Morse says congratulations to the product team, which has been busy launching things over the last quarter, like a news product on Facebook.
“We have some really talented people, and are refreshing the way we go about launching products and the innovation we use. They will be a big part of our success going forward.”
Last question, and it was really just clarifying something, so Morse signs off by saying he appreciates everyone joining the call.