Yahoo Recovery Undermined By Sliding Advertising Revenue

Yahoo’s hopes of a recovery under CEO Marissa Mayer suffered a blow after the company’s second quarter results revealed that falling income from advertising is undermining her efforts.

Revenues during the period between April and June amounted to $1.135 billion (£0,.75bn), a seven percent year-on-year decrease as display revenue fell by 12 percent to $472 million (£313m) and search revenue slumped by 9 percent to $418 million (£277m).

Yahoo did post a $331 million profit (£218m)during the quarter, a 46 percent increase from the year before, but this has been largely attributed to the success of Chinese website Alibaba, in which Yahoo has a 24 percent stake.

Yahoo advertising revenues

Mayer recently celebrated her first anniversary in charge of Yahoo and has implemented a number of changes during the past twelve months.

She has overseen the closure of a number of services, the revamp of Yahoo Mail and the Yahoo homepage, while she has also given the greenlight to a number of acquisitions, most notably Tumblr for $1.1 billion (£730m).

Mayer has placed a particular emphasis on mobile, an area in which she felt Yahoo has underinvested in, and one which was ripe to increase the company’s share of the online advertising market.

Yahoo has also implemented a feature into Yahoo Mail which allows the company to scan and analyse emails for customised advertising.

Mayer recovery

Unsurprisingly, Mayer chose to focus on the success of her achievements rather than the slump in revenues.

“I’m encouraged by Yahoo’s performance in the second quarter.  Our business saw continued stability, and we launched more products than ever before, introducing a significant new product almost every week,” said Yahoo CEO Marissa Mayer.

“From the new Yahoo News, the new Yahoo Sports app, the redesigned Yahoo search, the new Flickr, the new Yahoo Mail for tablet, the Yahoo Weather app, our new Yahoo app with Summly – this quarter drove tremendous improvements in our product line and our users responded with increased usage and engagement.”

Earlier this week, Yahoo won a court order that allowed it show how it fought off government demands for customer data, following the revelations of whistleblower Edward Snowden.

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