Yahoo net revenue down slightly in third quarter

SAN FRANCISCO Tue Oct 15, 2013 7:49pm EDT

The Yahoo logo is shown at the company's headquarters in Sunnyvale, California April 16, 2013. REUTERS/Robert Galbraith

The Yahoo logo is shown at the company's headquarters in Sunnyvale, California April 16, 2013.

Credit: Reuters/Robert Galbraith

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SAN FRANCISCO (Reuters) - Yahoo Inc's net revenue dipped slightly in the third quarter as prices for its display ads remained under pressure.

Yahoo shares were up 16 cents at $33.54 in after market trading on Tuesday after initially rising more than 4 percent.

Yahoo also announced it would sell fewer shares than originally agreed with Alibaba Group Holding Ltdwhen the Chinese e-commerce company goes public.

That means Yahoo, which owns a 24 percent stake in Alibaba, will reap more gains if Alibaba's stock surges after the IPO, said Ben Schachter, an analyst with Macquarie Research.

"The idea is you don't want to have to sell at the IPO price, you want to sell later to potentially get the appreciation going up," he said.

Yahoo's core business of selling online display and search advertising continued to struggle in the third quarter, Schachter said, as the company faced fierce competition from Facebook Inc and Google Inc.

Prices for Yahoo's display ads declined seven percent year-over-year, while the number of display ads sold increased roughly 1 percent, Yahoo said.

The Web portal reported $1.081 billion in net revenue, which excludes fees paid to third-party websites, in the three months ended September 30, compared with $1.089 billion in the year-ago period. The average analyst expectation was for net revenue of $1.082 billion according to Thomson Reuters I/B/E/S.

Yahoo said it earned $297 million in net income in the third quarter, or 28 cents a share, compared to $3.16 billion, or $2.64 a share in the third quarter of 2012, when Yahoo's results included a $2.8 billion gain from the sale of a portion of its stake in Alibaba Group.

Excluding certain items, Yahoo said it earned 34 cents per share, a penny above the average analyst estimate.

Yahoo's shares have risen roughly 70 percent since the start of the year.

(Reporting by Alexei Oreskovic. Editing by Andre Grenon)

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Comments (3)
daveinNJ wrote:
yahoo has to have views off by 10% after the change in yahoo groups. I have 10 groups that posted hundreds of posts per month, now not even 100 posts for all of them combined.

I have not posted as I cannot figure out how to read posts. this change has made yahoo an outcast in my world.

Oct 15, 2013 8:11pm EDT  --  Report as abuse
Hermist wrote:
I stopped using yahoo. It has moved too much to the right. Start to look like Fox . Their entertainment section or “lite news” are mostly commercials for a product. Sport news is a mess. Used to be good. And so it goes1

Oct 15, 2013 8:25pm EDT  --  Report as abuse
bill1212 wrote:
But ground beef and chicken are up to $4.59 a pound, and who cares?

Oct 15, 2013 10:07pm EDT  --  Report as abuse
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