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Internet search engine Yahoo! Inc. (YHOO) Tuesday said its second quarter profit increased 8% from last year, helped by lower operating expenses, despite a 13% decline in revenues. Providing its third quarter forecast, Yahoo said it expects revenue to come in lower than that recorded in the second quarter. The company also said indicated the launch of its new homepage with several additional features available in the U.S., and indicated its roll-out in France, India, the UK, and on mobile devices over the coming week. Following the announcement of its second quarter results, Yahoo shares lost more than 3% in the after-hours trading.
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| | | {loadposition contentad} | | | | | The Sunnyvale, California-based company reported second quarter net income attributable to Yahoo! of $141 million, up 8% from $131 million in the prior year quarter. Earnings per share rose 11% to $0.10 from $0.09 per share in the previous year quarter. Excluding items, non-GAAP net income was $229 million or $0.16 per share, compared to $225 million or $0.16 per share in the prior year quarter. On average, 30 analysts polled by Thomson Reuters expected the company to earn $0.08 per share for the second quarter. Analysts' estimates typically exclude one-time items. GAAP income from operations for the second quarter fell 25% to $76 million from $101 million a year ago. Operating income before depreciation, amortization, and stock-based compensation expense slipped 10% to $385 million from $427 million last year. Second quarter revenues of Yahoo declined 13% to $1.57 billion from $1.80 billion in the same quarter last year. Revenues, excluding traffic acquisition costs, were $1.14 billion, compared to $1.35 billion a year earlier. Thirty-one analysts had a consensus revenue estimate of $1.14 billion for the second quarter. Yahoo had earlier indicated second quarter GAAP revenue expectations in the range of $1.425 billion to $1.625 billion. Internet data tracking firm comScore Inc. (SCOR) reveals Google Inc. (GOOG) continuing to lead the U.S. core Web search rankings in June, while Yahoo trailing a distant second. Google, however, lost market share in June, dropping to 78.48% from 78.72% in May. Yahoo's share rose to 11.04% from 10.99%. Bing, Microsoft Corp.'s (MSFT) new search engine, increased the software giant's share of the United States search market by 1% in its first month of operation. In a separate development, Yahoo today revealed the launch its new homepage, indicated to be more easy on the eye than the previous one with several additional features. In the new web page, users can bring in numerous applications on to the My Favorites section that includes accessing social networking services such as Facebook. Thus without leaving Yahoo, users can follow other sites. The news section will automatically display articles from newspapers located in a user's area. Users can also broadcast their thoughts as in Facebook. The new homepage will be available in the U.S. at http://yahoo.com/trynew and will roll-out in France, India, the UK, and on mobile devices over the coming week. Additional global roll-outs are planned, beginning next month. More enhancements to the Yahoo homepage, including additional apps, will be added in the coming months, the company said. Yahoo's homepage is one of its best valued assets and is the second-most visited web page in the U.S. The project to revamp the homepage was initiated during former chief executive Jerry Yang's tenure and the current CEO Carol Bartz reportedly took it up in her priority list and wanted it to be done ahead of the previous deadline. Yahoo has been attempting to stabilize itself amid the downturn under Carol Bartz, who was hired in January following a turbulent period that saw an unsolicited takeover bid from software giant Microsoft and stiff competition with Google in the Internet search market. The internet giant has been suffering from declining ad revenues and increased competition from Google for the past several quarters. The arrival of sites such as Facebook has made the situation tougher for Yahoo. For Yahoo, a takeover effort by software giant Microsoft fell apart last year and an advertising deal, each with Google and Microsoft, did not work out. Last month, Microsoft launched its Bing search engine, making matters worse for Yahoo. Recently, the market was abuzz with rumors that Microsoft and Yahoo were once again discussing a deal that involved a search and advertising partnership. AllThingsDigital's Kara Swisher reported, citing sources at both companies, that top executives from Microsoft have flown to Silicon Valley on Thursday to iron out the remaining issues. She wrote that if all goes well, the deal could be announced within the next week. Bloomberg has also reported that the two companies are close to signing a deal, citing two people familiar with the matter. There have been talks between the two companies about a possible partnership after Yahoo thwarted a Microsoft takeover bid last year and Google terminated a a search advertising deal with Yahoo amid regulatory concern. Both Microsoft and Yahoo have turned on their efforts at gaining online search market share from undisputed leader Google.
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