SUNNYVALE, Calif., April 16 (UPI) -- Despite falling net income, Yahoo showed signs of recovery in its ad business, and found some cheer in surging profits from Chinese e-commerce giant Alibaba.
Yahoo saw its profit fall 20 percent to $311 million for the quarter ending March 31, but it was still better than analysts expected. Display advertising sales were $453 million, and display revenue rose 2 percent to $409 million after subtracting commissions. Yahoo CEO Marissa Mayer said that revenue, after paying commissions, was at $1.087 billion in the first quarter -- the first time that figure has grown since the end of 2012.
Mayer called this an "important shift" in the company's efforts to regain ground in its core businesses while expanding mobile and video initiatives. Mayer said these new initiatives are seeing rapid growth, but did not break down the numbers.
Meanwhile, Yahoo reported that Alibaba made a profit of $1.36 billion, soaring 110 percent, with net sales rising to $3.06 billion for the fourth quarter of 2013. Yahoo reports Alibaba earnings with a one-quarter lag.
“The results definitely exceeded expectations,” said Sameet Sinha, an analyst with B. Riley & Co. in San Francisco. “We can expect to see the first quarter again be very solid because of the Chinese New Year.”
Yahoo owns a 24 percent stake in China-based Alibaba Group Holdings, which was valued in February at $153 billion by analysts polled by Bloomberg.
Alibaba’s earnings for the period were greater than Facebook and Yahoo, while it generates more profit on each dollar of revenue than Apple.
Sales were strong during November's "Singles' Day," for which the company offered shopping promotions and discounts. The company currently generates 70 percent of China’s package deliveries.
Alibaba is in the process of applying for an initial public offering in the U.S. -- one of the most anticipated offerings of the year, with many analysts speculating it could be bigger than the $16 billion raised by Facebook.
[Bloomberg] [San Jose Mercury News]