Yahoo’s fourth-quarter results weren’t a blowout, but they’re still a win for the nascent Marissa Mayer Era.
Shares jumped 5% in after-hours trading Monday, after Yahoo reported earnings of 32 cents per share. That handily beat estimates from analysts polled by Thomson Reuters, who expected earnings of 28 cents per share.
Excluding traffic acquisition costs — the portion of its revenue that Yahoo shares with partners — revenue came in at $1.22 billion, right around what analysts were expecting.
Mayer is six months into her new role as CEO. She immediately set out to revamp Yahoo’s business strategy, saying that she wants Yahoo to focus on personalizing the Web for its users.
Industry watchers and investors seem to love Mayer, a former Googler. Shares closed Thursday at their highest level since September 18, 2008.
But Mayer has a long way to go to solve Yahoo’s core problems, and analysts want more details on her plans — especially those involving Yahoo’s two main sources of advertising revenue.
Yahoo gave up on search years ago, partnering instead with Microsoft’s Bing. Mayer called Yahoo’s search revenue “disappointing” last quarter, but the fourth-quarter numbers were much better: Search revenue rose 14%, to $427 million.
The bigger concern is Yahoo’s display revenue: sales from banners, videos and other graphic ads. Display sales fell 5% over the year to $520 million for the fourth quarter, though that’s something of an improvement over the even sharper drops in some previous quarters.
Analysts are looking to Mayer for more clarity on what she plans to change in those sectors.
Meanwhile, Mayer is trying to shake up the Yahoo culture at large, urging Yahoo staffers to move more quickly and interact with the Web the way the company’s users do. To that end, she recently eliminated company-issued BlackBerrys in favor of new Apple, Google and Microsoft phones.
Last week at the World Economic Forum in Davos, Mayer said the smartphone switch is part of a larger plan for Yahoo to “get back to its roots.”
