By Alexei Oreskovic
SAN FRANCISCO Jan 28 Yahoo Inc's
online ad prices slid again in the fourth quarter and Alibaba,
the Chinese e-commerce giant in which it owns a big stake, saw
revenue growth decelerate from its recent rip-roaring pace.
Overall revenue fell 6 percent in the last three months of
the year to $1.266 billion, marking four consecutive quarters of
eroding revenue. The company said that prices for both online
display ads and search ads declined in the fourth quarter.
The company's shares were down 5.8 percent at $36 in
after-hours trading on Tuesday.
"Normally you get better pricing in Q4," said BGC Partners
analyst Colin Gillis. "The core business is shrinking."
Yahoo's efforts to revamp its slumping business have come to
the forefront following Chief Executive Officer's Marissa
Mayer's decision to fire Chief Operating Officer Henrique de
Castro this month, after only slightly more than a year on the
The move marked the first major change of plans since Mayer
took the helm in July 2012, and underscored Yahoo's ongoing
challenge to rekindle revenue growth.
Mayer has moved aggressively to kick-start the company with
product makeovers, acquisitions and big media hires, including
celebrity newswoman Katie Couric. But the ad sales business
continues to struggle at a time when rivals such as Google
, Facebook and Twitter are posting
strong revenue growth.
Yahoo's quarterly results also included some of Alibaba's
financial results from the third quarter because it owns about
24 percent of that company.
The Chinese company's revenue increased 51 percent
year-over-year to $1.776 billion. While still robust, that
growth rate was slower than the 61 percent clip that Alibaba
delivered in the second quarter.
Many investors are interested in the performance of Alibaba,
which is expected to have an initial public offering in the
Yahoo's net income of $348.2 million rose from the $272.3
million earned in the year-ago period. Excluding certain items,
Yahoo said it earned 46 cents a share, beating the average
analyst expectation of 38 cents, according to Thomson Reuters
Yahoo said that revenue from display ads was down 6 percent
year-over-year in the fourth quarter, while the price per ad,
excluding Korea, declined 7 percent.