Yahoo yesterday posted second-quarter net profit that was down from a year ago as growth in its historically strong display-advertising business slowed.
The plan to better compete with Google on search advertising is yet to be seen.
Yahoo executives said revenue for the rest of the year would be lower than previously anticipated because of continued lower than expected display ad growth and larger declines in search affiliate revenue than expected.
Yahoo’s stock dropped more than three percent in after-hours trade.
Net earnings for the quarter ended 30 June were £78 million, down nearly two percent from £80 million, a year ago.
Yahoo revenue rose 11 percent to £657 million from £547 million a year ago.
Sales from ads the company placed on affiliate sites fell five percent, while ad sales on its own sites rose 18 percent from a year ago.
Jerry Yang, co-founder and chief executive said: "I am focused on doing everything we need to do to strengthen our business, capture long-term growth opportunities and create increased value for our shareholders."
Yahoo lost its lead in the search market toGoogle in recent years and watched Google turn search advertising into a ‘money making machine’, reaping £5.3 billion in revenue last year.
Yahoo's stock has dropped about 13 percent from a year ago, while Google's has jumped about 37 percent.
July 18 2007
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