Yahoo reports another sales drop as ad clicks yield less

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Yahoo reported a 5% drop in revenue for the third quarter, with the money it makes from display and search ads both continuing to decline.

Revenue for the period ended 30 September was $1.2 billion, down 5% from a year earlier, Yahoo said Tuesday. Excluding traffic acquisition costs, revenue was down 1%.

Its profit for the quarter was $297 million, much lower than last year, when it made a big one-off gain from selling shares in China’s Alibaba Group. On an operations basis, Yahoo’s profit for the quarter was $93 million, a drop of 39%.

"I’m very pleased with our execution, especially as we’ve continued to invest in and strengthen our core business," CEO Marissa Mayer (pictured) said in a statement.

Mayer took over the company last July and is trying to restore Yahoo to its glory days, by making products like Yahoo Mail cool again. She’s also made a string of acquisitions, including Tumblr for $1.1 billion.

The number of people using Yahoo’s services has grown – on Tuesday it said it has 800 million monthly users, up 20% in 15 months – but it hasn’t turned those users into top-line growth.

Yahoo sold slightly more display ads last quarter than it did a year earlier, but the price per ad (excluding Korea) fell, bringing display revenue down by 7%, to $470 million, the company said.

It also sold more clicks on ads – they were up 21% from last year – but the price per click (excluding Korea) also declined, by 4%. Search revenue overall fell 8% in the quarter, to $435 million.

IDG News Service

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