Yahoo’s latest chief executive, Marissa Mayer, showed improved financial results and promised a renewed focus on the company’s mobile strategy
Yahoo chief executive Marissa Mayer says that the company she has been piloting since July is doing a strategic reassessment, including fixing its broken mobile strategy, and is progressing to a brighter future as a reinvigorated consumer Internet company.
Mayer says her “top priority” is to rebuild Yahoo’s mobile strategy in which the company has “underinvested” while mobile is the fastest-growing area of the Internet.
Mayer made her first appearance as chief executive on an earnings conference call on 22 October following the release of financial results for Yahoo for the third quarter of 2012. It was also the first opportunity for her to speak publicly about her vision for the troubled firm.
Mayer had a backdrop of positive results to lay out her vision. Revenue rose by 2 percent to $1.1 billion (£690m) and earnings per share (EPS) shot up by 66 percent to 35 cents a share from 21 cents in the third quarter of 2011. That EPS figure excludes a $2.8 billion gain from the sale of Yahoo’s ownership of Alibaba, a China-based Internet company.
Digging deeper, Yahoo said that search engine revenue was $414 million, up 11 percent from the year ago quarter and that display ad revenue was $452 million, flat compared to the year ago quarter. Both figures were portrayed as “ex-TAC”, meaning the company excluded “traffic acquisition costs” from the revenue figures.
“Real success has been achieved. We have much work to do and it will take time,” said Ken Goldman, Yahoo chief financial officer, whose first day on the job was on 22 October. “But the evidence of stabilised financial results is beginning to show in this quarter.”
New executive team
Goldman was one of a number of new top executives at Yahoo Mayer introduced on the conference call. Also new are Henrique de Castro, chief operating officer, who was recruited from Google, Jacqueline Reses as executive vice president of people and development and Kathy Savitt as chief marketing officer.
“In Yahoo Fantasy Sports, I would draft this exact group as my dream team,” Mayer said, a reference to one of the popular features on Yahoo.
Yahoo has many popular online properties, she continued, that deliver email, instant messaging, news, sports, videos and photo sharing that the company can invest in for future growth.
However, Mayer admitted that Yahoo’s partnership with Microsoft for it to sell advertising on Yahoo search pages “has fallen below our expectations”, but she added that Yahoo benefits from an agreement from Microsoft to make a minimum revenue guarantee.
Focusing on mobile
But the biggest problem area that Mayer has identified at Yahoo is its lack of a competitive mobile strategy as computing moves from desktop computers to mobile devices such as smartphones and tablets.
“Yahoo hasn’t capitalised on the mobile opportunity. We haven’t effectively optimised our website, we have under-invested in our mobile front-end development and we have splintered our brands,” Mayer said, adding that Yahoo currently has 76 different applications available on either Apple iOS or Google Android-based mobile devices.
“All of this needs to change,” she concluded. “Our top priority is a focused, coherent mobile strategy.”
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Originally published on eWeek.