Yahoo boss Marissa Mayer loses advertising revenue
Marissa Mayer actually took the helm two years ago to halt Yahoo's decline. But her efforts to boost the advertising business at the internet veteran seem to be falling flat.
Yahoo boss Marissa Mayer is running out of advertising customers. The US internet company made significantly less money from graphic ads in the second quarter. This pulled total turnover down by 4 percent to 1.1 billion dollars. Profits fell by 19 percent to 270 million dollars compared to the same period last year.
"We are not satisfied with the results in the second quarter," Mayer admitted on Tuesday (local time) at the company headquarters in Sunnyvale, California. Since taking office in the summer of 2012, the former Google manager has been pursuing the plan of attracting more users through new content and functions, thereby also bringing more advertisements to Yahoo's offerings. However, investors are not very convinced by the development so far. The share price fell by 3 percent in after-hours trading.
Yahoo is suffering from tough competition from rivals such as Google and Facebook. All three companies are largely financed by advertising. On the one hand, they sell graphic advertisements - so-called banners - and on the other, paid links on search engines. Yahoo was once again able to make gains in search engine advertising, which slowed the downward trend somewhat.
Mayer's relationship with advertisers recently hit the headlines when she was late for an important dinner at an industry trade fair in Cannes. Critics interpreted this as disrespect for advertisers.
Fortunately for Mayer, Yahoo is a major shareholder in the Chinese internet retailer Alibaba, which plans to go public in New York in the near future. The IPO could be bigger than that of Facebook. In the past, the Alibaba stake had already compensated for many problems in Yahoo's core business.
However, Yahoo will sell fewer shares in the course of the IPO than originally announced, namely 140 million dollars instead of 208 million dollars. The announcement was received positively by many investors, as it means that Yahoo would benefit from a possible subsequent increase in the share price. Yahoo CFO Ken Goldman promised to distribute at least half of the after-tax proceeds from the remaining share sales to its own shareholders. (SDA)
