Almost two years have passed since Carol A. Bartz, who was originally hired to restore the company’s growth, took over as chief executive of Yahoo.

The company’s financial results, revealed Tuesday, show that Yahoo is making only modest headway as it tries to regain some of its former growth as well as its glory. Its business was nearly flat in the third quarter.

“They’re treading water right now,” said Jordan Rohan, an analyst with Stifel, Nicolaus & Company told the New York Times. Bartz also acknowledged that much work was ahead for Yahoo, based in California.

“First you walk, then you run, then you fly,” Bartz commented in a conference call with securities analysts.

Still, though, she pointed to certain areas showing signs of improvement or at least stability. Yahoo’s display advertising business is doing relatively well since revenue from display ads on the Web portal increased 17 percent. But declines elsewhere sadly eroded those gains. As a result, revenue from search advertising and fees both fell.

Overall, Yahoo’s net income more than doubled, to $396 million, or 29 cents a share, from $186 million, or 13 cents a share, in the year-ago quarter. The majority of the increase, 13 cents a share, was a result of a one-time gain from the sale of its HotJobs business. Excluding the sale, Yahoo would have had a profit of 16 cents per share. Revenue climbed 2 percent, to $1.6 billion. Excluding payments to advertising partners, total revenue was $1.2 billion.

Yahoo is trying to emerge from financial stagnation, and now Bartz is under pressure to show actual results.

Her plan has been to focus on the company’s strengths as a Web portal. Yahoo receives nearly 830 million unique monthly visitors, making it still the most visited website on the Internet, worldwide.

Bartz considers outsourcing services less important. Yahoo has already handed its search engine off to their rival, Microsoft. She talked about the transition of Yahoo’s search engine to Microsoft, a process that is about to being finished in the United States. She also mentioned the progress Yahoo has made behind the scenes revamping the technology behind its Web portal. The overhaul is eliminating many of the roadblocks that made it nearly impossible to introduce new services quickly. Bartz also noted an improvement in profit margins, a result of her cost-cutting strategy over the last year. Margins in the quarter doubled to 12 percent from the same quarter a year earlier.

Yahoo shares rose 0.7 percent in after-hours trading, to $15.60.

About The Author

Eiko Watanabe is a Blast staff writer in New York

Leave a Reply