14 DAY TRIAL // Yahoo has revealed its financial results for the second quarter of 2010. Overall, the numbers were less than exiting with flat revenue, but higher income. Display advertising, always a strong point of Yahoo, was up for this quarter, but only enough to compensate for a decline in search ad revenue.
“Revenue was $1,601 million for the second quarter of 2010, a two percent increase from the second quarter of 2009. Income from operations for the second quarter of 2010 was $175 million, compared to $76 million in the second quarter of 2009. Excluding restructuring charges of $65 million in the second quarter of 2009 and $10 million in the second quarter of 2010, income from operations grew 32 percent in the second quarter,” Yahoo said in a statement.
Revenue was up just two percent for Yahoo, year-over-year, numbers that won’t satisfy investors. Display advertising revenue was up 19 percent in the second quarter, in line with what analysts expected. However, search ad revenue was down eight percent from the same period last year. This was lower than expected, but still considerably better than the 14 drop it saw in the first quarter. For the current quarter, Yahoo doesn’t estimate much ad sales growth if any.
“We’re pleased that we continued to deliver strong operating income and margin expansion,” Carol Bartz, Yahoo CEO said. “Our search fundamentals are improving and we posted another quarter of healthy display advertising growth.”
Overall the picture is not exceptionally pretty. Yahoo barely managed to be in line with expectations and failed to meet them in most cases. The restructuring and cost-cutting campaign under Bartz’s leadership is paying off, income is significantly higher on the same revenue, but Yahoo needs to start showing some growth for investors and analysts to change their tune. This quarter, Yahoo is expected to complete the switch to Bing as the search engine powering Yahoo Search and it should be interesting what effect, if any, this will have on its performance.