Yahoo’s Q1 Earnings: New CEO Will Get Some Satisfaction!
Yahoo turned in better-than-expected earnings today in its first quarter, and — as usual — I will be liveblogging the call with CEO Scott Thompson.
Yahoo beat Wall Street estimates in its first-quarter earnings report earlier today, with revenues of $1.08 billion and earnings of 23 cents. That’s a gain of 28 percent from a year ago in net earnings and 38 percent per diluted shares.
2:03 pm: We begin with a new investor relations dude, who has replaced Marta Nichols. She is now CEO Scott Thompson’s new chief of staff.
His name is Joon and he seems much more festive than Marta, who was very, very serious.
I could not be more thrilled.
Thompson comes on quickly enough and he is also pretty jaunty.
Yahoo has been “moving very fast” on a range of things. And how — this guy seems to eat Ritalin for breakfast.
But there is still a long way to go, he notes.
“I am not satisfied with the pace of top-line growth,” said Thompson, who added he would not be until Yahoo was keeping up with others like Google, which turned in a much stronger report last week.
He can’t get no satisfaction — but he will!
Thompson said one problem was still its ongoing search and advertising partnership with Microsoft. It’s still rocky in terms of monetization and more.
2:09 pm: But first, it is CFO Tim Morse’s turn to re-read the results that were just released.
I am not actually listening until he gets to the part about Thompson giving more deets soon.
Morse is teeing this up by noting that Yahoo is adding more to its bag of tricks beyond search and display, such as commerce.
This will take investments, which are core to success.
Thompson is back: “This business can and will grow going forward.”
I am holding him to that one!
He starts first by talking about Yahoo’s content business, which remains strong, but he points out the obvious: Engagement is off.
In other words, the kids love Facebook. Also Instagram. Also Tumblr.
That’s why Thompson says he told the staff of Yahoo to rethink it all when he arrived in January.
“Yahoo has been doing way too much for too long and has only been doing a few thing well.”
As in, jack of all trades, master of none.
“We have to be clearer going forward about what we won’t do,” said Thompson.
2:22 pm: He goes over some specifics.
Shutting down 50 properties — Thompson does not say which, though.
Dedicating key teams to innovation.
Something else about being nimbler.
Data. Also data. Did I say data?
Research and development only for Yahoo-owned and -operated properties.
That is six points, which will be underscored by better execution.
Thompson has been talking about the “complex processes” that was once called peanut butter by one former exec.
Peanut butter is sticky and that’s the point.
2:26 pm: Oops, when talking about layoffs, Thompson says “PayPal” and not “people.” He used to run the eBay payments unit.
Thompson moves to the board changes — five new members and the jacking of five from previous year.
He then defends his decision to sue Facebook over patent infringement. “Facebook must do the same or change its practices,” he sad.
Thompson adds the company is in “active” talks with its Asian partners, Softbank of Japan and Alibaba of China.
And some news! Talks related to its Japanese assets have a gap in valuation, so Yahoo is focusing on the Chinese ones.
And in summation:
“We don’t have to reinvent who we are, but we do need to reinvent our experiences … We have to move and think like a growth company.”
That would be nice.
2:32 pm: Time for Q&A, in which I like to see exactly how wimpy Wall Street analysts can be in asking tough questions.
The first is asking about some strategery specifics, including whether it can get the cool $1 billion AOL just got from Microsoft.
Thompson talks about the new commerce unit, which will be co-led by someone who worked with him at PayPal. It’s not really new, since Yahoo is in that arena already.
Morse answers on intellectual property issues, noting Yahoo is happy to license its family jewels. Most tech companies use these patents as a defense, but no longer.
The next question is on morale of sales force. I can answer that! Not good!
But Morse says there is progress.
Morse also notes that Yahoo still has search revenue per share guarantee from Microsoft, but that he hopes it will get better before that deal runs out.
Back to Thompson. He wants better results to advertising customers.
He keeps saying “at or above the market rate.” Yahoo’s growth has been lackluster, so this would be a key victory if Thompson could pull it off.
2:39 pm: A question about mobile, which has been one of Yahoo’s most embarrassing holes of all.
Besides Facebook, the kids love those smartphones. You would not know it from Yahoo’s shoddy products.
“We need to get good real fast in mobile … and we’re not there today,” said Thompson. Actually, Yahoo was not there yesterday, either.
Note to Scott: Real fast is a good idea.
There is a question about its advertising platforms, a back-handed way of asking if it is for sale. It is.
Thompson notes that there has been a lot of evaluating, but that “we have not come to a conclusion.”
2:42 pm: A question about its revenues from its Asian assets. China’s Alibaba — which is not run by Yahoo — is doing great.
It’s kind of like being the dude who bought Apple some years ago and is now rich through no effort of his own.
Thompson addresses a question about dividends, which Apple just gave out. Yahoo will be sticking with stock buybacks, so everyone can put away those Porsche catalogs.
I am briefly distracted during some accounting questions by the new Apple ads with Zooey Deschanel. She is so adorkable, it makes me slightly queasy.
Back to Thompson, who is non-answering a question about possible acquisitions. He’s not talking, but I am sure he will be buying if he gets a transaction with Alibaba done finally.
Given the long and convoluted and always aborted deals over the years, this would be cause for much celebration if Thompson pulls it off.
(And, if he does, I pledge to buy him dinner in Boston at the restaurant of his choice!)
2:52 pm: A question of what the heck Thompson actually means when is he talking about using Yahoo’s data.
There are apparently three main places.
Personalization, which is uniquely related content, which gives him a chance to egregiously tout Boston sports teams.
Contextual advertising, which means ads you want.
And data and analysis to advertisers that will help them do a better targeting job. Oh, joy.
A search question, which I have decided to ignore, since I feel search is simply not Yahoo’s business any longer and should be sold off.
But what do I know?
Morse keeps yammering away on “better experiences for our users” by its search team.
Hey, it’s called Google. Then, Bing. And only then, Yahoo.
2:58 pm: Last question, which I missed while I was focusing on search ranting.
And with that, it’s back to the future for Yahoo. Hopefully.