Yahoo's Turnaround Woes Mount

Yahoo Inc. on Tuesday turned in another poor quarter and warned investors of a possible revenue hit in the advertising- heavy holiday period, furthering fears that Chief Executive Marissa Mayer's turnaround plan has stalled. - Free Forex Trading -

With doubts growing as she enters her fourth year at the helm, Ms. Mayer signaled Yahoo will adopt a new strategy to " reset" the company's focus on fewer areas and shift further into mobile. - UK home owner loan -

Weak demand from advertisers has hampered Ms. Mayer in her tenure at Yahoo. Her investments in high-profile content, including rights to live stream a coming NFL game, and development of a suite of new mobile apps, have so far failed to attract enough ad dollars to grow the business. - Car Free Insurance Online Quote -

Yahoo reported its revenue rose about 7% to $1.23 billion in the third quarter. But its sales excluding commissions paid to search partners fell 8% to $1 billion, the largest decline in at least four years. Yahoo has begun to pay its partners more money for users in recent quarters. - Consolidating Private Student Loans -

The Sunnyvale, Calif., company now expects fourth-quarter revenue, including traffic acquisition costs, of $1.16 billion to $1.2 billion, down from $1.25 billion last year and below the average analyst estimate of $ 1.33 billion, according to Thomson Reuters. - data recovery service los angeles -

"The guidance just is horrible," said Sameet Sinha, an analyst at B. Riley & Co. "They are talking about numbers being down sequentially in the fourth quarter, which is unheard of for an advertising company—it's seasonally the strongest quarter of the year." - free quote for car insurance -

On a call with analysts Tuesday, Ms. Mayer acknowledged her difficulty growing Yahoo's core business of advertising, and hinted at a major reorganization on the horizon. - conference calling companies -

"We see a unique moment and opportunity for Yahoo, as we move into 2016, to narrow our focus on fewer products with higher quality," Ms. Mayer said. "We need to work to improve our relevance to end users and how many times they come to us." Ms. Mayer said she plans to share more specifics about this plan in the coming months.

Shares of Yahoo, down 16% over the past year, fell 1.2% to $ 32.43 in after-hours trading.

Yahoo has already decided to cut its losses and retrench from original online video content, a key strategic area for Ms. Mayer.

The company said it has written off $42 million in expenses for its development of three video series, including a one-season revival of the popular "Community" show.

"We couldn't see a way to make money over time" in those video series, Ken Goldman, Yahoo's finance chief, said on the call with analysts.

One area where Yahoo clearly plans to double down is search, thanks to a new three-year agreement with Google Inc. The world's largest search engine will provide Yahoo with search ads on both desktop and mobile platforms. Yahoo, meanwhile, can select which search queries to send to Google and isn't obligated to send any minimum number of search queries.

Google will pay Yahoo a percentage of the gross revenues from ads displayed on Yahoo, with the percentage varying depending on where the ads are displayed. Yahoo will pay Google fees for requests for image search results or Web algorithmic search results. The deal expires at the end of 2018.

The agreement, which will be reviewed by the Justice Department, comes after Yahoo in April amended the terms of its search partnership with Microsoft Corp. to give it more control over how search results are presented on both desktop computers and mobile devices.

Yahoo posted a profit of $76 million, or 8 cents a share, compared with a year-earlier profit of $6.77 billion, or $ 6.70 a share, which was boosted by the sale of Alibaba Group Holding Ltd. shares in the Chinese e- commerce company's initial public offering. On an adjusted basis, per-share earnings were 15 cents in the latest quarter, below analyst estimates of 17 cents a share.

Notably, revenue growth from "Mavens"—a financial metric the company introduced earlier this year to track mobile, video, native and social ads—rose 43% to $422 million; however, that is slower than the 60% growth reported in the second quarter. Mavens revenue made up about 34% of the company's total revenue. Ms. Mayer has steered investors to this stable of assets to offset the declines from elsewhere in the company.

Ms. Mayer is also grappling with an exodus of managers as she struggles to show signs the company can post steady growth. Two of her top deputies — marketing chief Kathy Savitt and former acquisitions head Jacqueline Reses—left the company in the recent weeks, raising concerns about morale inside the company.

Ms. Mayer told analysts on Tuesday that recent leadership changes are "the result of careful planning," and that "our leadership team today is unequivocally the strongest during my tenure."

Ms. Reses was put in charge of overseeing the spinoff of Yahoo's stake in Alibaba Holdings Group Ltd.Yahoo has reassured investors that the spinoff will be completed by year-end, although Ms. Mayer said Tuesday the closure may extend to the end of January. Yahoo holds about 384 million shares, a roughly 15% stake valued Tuesday at more than $27 billion.

Last month, Yahoo disclosed the Internal Revenue Service denied its request for a favorable ruling of the plan. Yahoo said it would move forward with the proposed spinoff anyway, running the risk that the IRS could challenge the spinoff in a future audit and potentially putting shareholders on the hook for billions of dollars in taxes.

(Source by: nasdaq.com)