New Yahoo! CEO promises action after poor quarter

SAN FRANCISCO (AFP) ― Yahoo!’s brand new chief executive Scott Thompson promised urgent action to turn the company around on Tuesday after it reported another quarter and year of falling income and profits.

Thompson, named Yahoo! CEO only on Jan. 4, said the web giant needed to move quickly to exploit its huge bank of user data to regain market share, especially in display ads where it has lost ground.

The former PayPal chief stressed that Yahoo! needed to become an agile and “disruptive” force technology-wise to claw back Internet turf and advertising dollars lost to competitors like Google and Facebook.

“Yahoo! is fundamentally both a media company and a technology company. We need to be great at both,” he told analysts in a conference call.

“We will get speed back into the equation and move aggressively.”

Yahoo! fourth-quarter net earnings declined 5.3 percent from a year earlier, as revenues dropped 13 percent.

Earnings from core operations increased a solid 10 percent during the quarter to $242 million, the company said.

But net income fell to $296 million, down from $312 million a year earlier, with adjusted earnings per share stable at 24 cents.

Revenues excluding traffic acquisition costs ― the commissions Yahoo! shares with partners in the search ads business ― were three percent lower.

For the year the results were similar. Revenues after commissions were down five percent, partly blamed on the cut Microsoft takes from its shared search operations.

Operations income was up 3.5 percent for the year to $800 million, but net earnings fell 14.6 percent to $1.06 billion, and earnings per share for the year fell to 82 cents from 90 cents.

The earnings did not surprise, after boardroom battles and the departure of another chief executive hobbled efforts to turn the still-popular Internet anchor around.

The company has been steadily losing market share for display and search ad-related revenues on the Internet.

According to eMarketer, Yahoo!’s overall share of online ad revenues dropped last year to 11.0 percent from 13.3 percent in 2010, while market leader Google boosted its share to 40.8 percent from 38.5 percent.

Microsoft and Facebook also picked up ground at Yahoo!’s expense.

The biggest shortfall was in lucrative display advertising, the company said, blaming poor performance in the all-important North American market.

Getting the display ad business growing again is his “highest priority” less than three weeks into the job, Thompson said.

“We are after that with a real sense of urgency.”

Thompson said also that the company would better tap its “underappreciated” database on its 702 million unique monthly visitors ― 11 percent higher last year ― to get them to use Yahoo!’s websites and services more.

“The sheer number of users will not get us where we need to be,” he said. “We want our users to spend more time with Yahoo!.”

He declined to provide details on Yahoo!’s talks with its Japanese and Chinese partners over the possible disposal of its valuable Asian assets.

For more than a year the company has been weighing selling off those assets to benefit shareholders frustrated by the company’s falling share price.

Some believe that the resignation from the Yahoo! board earlier this month of company co-founder Jerry Yang will open the way for such asset sales.

But Thompson would only say that “We are in active discussion with our Asian partners.”