Yahoo Exceeds Sales & Profit Estimates

Yahoo! Inc. (YHOO), the biggest U.S. Web portal, reported profit and sales that beat estimates as Chief Executive Officer Marissa Mayer benefited from advertising demand and cost cuts during her first three months on the job.

Third-quarter earnings, excluding some items, were 35 cents a share, the Sunnyvale, California-based company said in a statement. Sales, excluding revenue passed to partner sites, was $1.09 billion. Analysts on average had estimated profit of 26 cents on revenue of $1.08 billion, according to data compiled by Bloomberg.

The fifth CEO in four years, Mayer is working to restore stability to management ranks and reverse three years of declining revenue as Web users ditched Yahoo in favor of competitors Google Inc. (GOOG) and Facebook Inc. (FB) Her turnaround effort is getting a boost from expense reductions as well as demand in the U.S., where the online advertising market is projected to grow 17 percent to $37.3 billion this year, according to researcher EMarketer Inc.

“The U.S. seems to be an area of strength, and Yahoo is bigger in the U.S.” than its competitors, said Herman Leung, an analyst at Susquehanna International Group who has a neutral rating on the shares.

Yahoo advanced in extended trading. The stock decreased less than 1 percent to $15.77 at the close in New York. The shares have dropped 2.2 percent this year.

Net income attributable to Yahoo rose to $3.16 billion, or $2.64 a share, from $293.3 million, or 23 cents, a year earlier. Income in the 2012 period included a net gain of $2.8 billion related to the sale of a stake in Alibaba Group Holding Ltd.

Ad Revenue

Revenue for display advertising, minus sales passed to partner sites, was little changed at $451.6 million in the quarter, while search revenue increased 11 percent to $414.1 million.

In a departure from past practice, Yahoo didn’t provide an outlook for sales and operating income. Google, Mayer’s former employer, doesn’t issue earnings forecasts.

Mayer has kicked off her Yahoo comeback strategy by hiring several senior deputies. Earlier this month she named Henrique de Castro, previously Google’s vice president of global partner business solutions, as operating chief. Last month, she hired Ken Goldman away from network-security provider Fortinet Inc. to replace Tim Morse as chief financial officer. In August, Mayer added former American Eagle Outfitters Inc. executive Kathy Savitt to lead marketing efforts.

Yahoo’s share of display ads, including banners, will be 9.3 percent this year in the U.S., down from 11 percent last year, EMarketer estimates. Facebook’s portion of the market will be little changed at 14 percent, while Google’s stake will rise about 2 percentage points to 15 percent.

Mayer has taken steps to curtail operations outside the U.S. She completed Yahoo’s sale of half its stake in Chinese partner Alibaba in September, and last week said Yahoo will shut its South Korea business.

Yahoo said it will return $3 billion in proceeds from the Alibaba transaction to investors, after using $646 million for buybacks in recent months.

Marissa Mayer Becomes Yahoo CEO

Story first reported from USA Today

Just days after Yahoo tapped former Google executive Marissa Mayer for its CEO post, the 37-year-old has taken on another high-profile role. After announcing that she was pregnant — and wouldn't let that interfere with her work duties — Mayer took center stage in the nation's often-heated debate over women's roles at home and in the workplace.

Reaction was swift, and in some cases, scorching, as her matter-of-fact declaration took on a life of its own in social media. Countless posts on Facebook, Twitter and throughout the blogosphere criticized her decision to keep working. Others warned that Mayer, who is expecting her first child, had underestimated the challenges of being a mom.

Much of the scrutiny comes because of the unique circumstances in play, says Laura Graves, associate professor of management at the Graduate School of Management at Clark University in Worcester, Mass. Not just a female CEO, but one who is expecting. Society has not given up traditional gender roles yet, she says.

And so Mayer's swift move to take over and revive the struggling Yahoo brand was quickly eclipsed this week by talk of her parenting choices, the pros and cons of taking a long maternity leave, female ascension in the workplace and the challenges of work-life balance.

Some of the myriad armchair critics have also suggested that her vast wealth and high-level position give her an edge — indeed, the luxury — that other working mothers don't have.

But it has gotten better

Though few would argue that raising a child while working has ever been easy, a series of advances since the 1960s have at least changed the circumstances faced by working mothers in the United States.

Equal Employment Opportunity Commission laws came into force prohibiting discrimination against new and expecting mothers, workplaces began offering greater flexibility. Today, telecommuting and on-site day care are more common.

Even so, many practical questions remain. How do the mental and physical drains of pregnancy affect a woman's performance at work? How much time does a mother need to recover physically after giving birth? What are the logistics of planning out child care?

Polling still reflects a deep cultural skepticism of mothers who decide to return to work.

In a 2010 report, the Pew Research Center found that 21% of adults in the USA said the trend toward mothers of young children working outside the home has been a good thing for society. Thirty-seven percent deemed it a bad thing, and 38% said it hasn't made much difference.

Deena Rosenberg, 29, of Teaneck, N.J., just returned to work at a public relations firm after a 12-week maternity leave for her first child. She says she has a good friend, also 29, who questioned her decision to go back to work and put her son in day care.

But even Rosenberg has concerns about Mayer's plans to work during her official maternity leave.
She sets a bad precedent and the corporations will now expect that to be normal maternity-leave behavior, she says


Celebs make it look easy.

High-profile women in areas such as business, politics and fashion have garnered headlines with their examples of what looks like an easy return to work.

Sarah Palin, who was governor of Alaska when she gave birth to her youngest son in 2008, was back on the job just three days later. Model Heidi Klum gave birth in October 2009 and sauntered back onto the Victoria's Secret runway in November. Then-expecting singer-turned-fashion designer Victoria Beckham told Glamour magazine in June 2011 that she planned to work right until her fourth child was born.

But as with Mayer, these women have resources that other working moms don't. They can hire full-time help. They are also in entrepreneurial or leadership roles that tend to give them more professional power than other workers.

Even with that cash and caché, some mothers predict that these women will lose out on certain things because of their demanding work schedules.

Elana Drell-Szyfer, CEO of cosmetics company AHAVA North America and a mother of three, says that working after her first child's birth was more difficult than she expected.

She figured she could manage business e-mails and other needs, but she was surprised by how much time it took to take care of her baby — and by the drain on her.

She recalls the night she realized she couldn't keep up.

While trying to nurse the baby and work on her laptop at the same time, Drell-Szyfer says she realized she couldn’t bond with her child, and didn’t appear professional answering emails at 3 a.m.

A double standard?

In June 2011, gossip website Gawker reported that Google co-founder Larry Page was expecting his second child. That was two months after Page took the CEO title at the technology behemoth. There were no follow-up headlines, no social media debates, no loud conversations about how he could lead an Internet giant and still be a father.

As for Yahoo, its board didn't seem to flinch at Mayer's pregnancy. Company representatives and Mayer — the company's fifth CEO in five years — weren't available for comment, but in a news release, Yahoo board Chairman Fred Amoroso said Mayer's   record in technology, design and product execution makes her the right leader for Yahoo.

Mayer, who was previously an executive at Google, said in the Fortune interview that Yahoo's directors "showed their evolved thinking."

As much as society has evolved, women still face the greater scrutiny when they decide to return to work after having children, says Rosalind Chait Barnett, a senior scientist at Brandeis University's Women's Studies Research Center.

She says that a man in Mayer’s position and his wife were expecting, people wouldn’t be talking about it. Women and men will wonder if she can do it, but that is a pressure men don’t have to deal with, Barnett says.

For more national and worldwide Business News, visit the Peak News Room blog.

For more local and state of Michigan Business News, visit the Michigan Business News blog.

For more Health News, visit the Healthcare and Medical News blog.

For more Electronics News, visit the Electronics America blog.

For more Real Estate News, visit the Commercial and Residential Real Estate blog.

For more Law News, visit the Nation of Law blog.

For more Advertising News, visit the Advertising, Marketing and Media blog.

For more Environmental News, visit the Environmental Responsibility News blog.

For information on website optimization or for the latest SEO News, visit the SEO Done Right blog.

New Yahoo CEO Has Plans for Ads and Revenue

First appeared in Wall Street Journal

New Chief Executive Scott Thompson's plan for turning around Yahoo Inc. is beginning to take shape: He wants to push the Internet company away from its advertising roots and get more of its revenue from fees and commissions, according to people familiar with the matter.

The 54-year-old executive, who was hired last month, hasn't mentioned specifics during meetings with employees and business associates.

He has made clear, however, that Yahoo's nearly single-minded focus on its existing websites and online-advertising sales hasn't worked, and that the "market" places little value on the company's core online-ad business, these people said.

Yahoo's online-ad sales have been flat in recent years while those of rivals like Facebook Inc. and Google Inc. have charged ahead.

In the past few weeks, Mr. Thompson has held intimate lunches and large-scale gatherings with Yahoo employees in which he has told attendees that he plans to divert more time and resources to Web services aimed at capturing future revenue, rather than trying to manage the profit margins of the company's current services, the people said.

Mr. Thompson hasn't ignored the online-ad business entirely. He has met with several top executives of Yahoo's major advertising-agency partners since his tenure began, people familiar with the matter said.

He appeared to make a minor gaffe last month during a brief appearance at a regularly scheduled meeting between Yahoo executives and one such ad agency, Interpublic Group of Cos., which controls hundreds of millions of dollars in digital-ad spending by big marketers.

When asked for his views about ad agencies, he said he prefers to be "as close to the customer as possible," and that "I don't like intermediaries that add no value," the people familiar with the matter said.

While Mr. Thompson added that good intermediaries "can change the equation," his comments surprised some attendees because ad agencies have previously clashed with Yahoo and other Internet companies that have tried to work directly with marketers, effectively cutting them out, these people said.

A spokeswoman for Yahoo declined to comment or to make Mr. Thompson available for comment. An Interpublic Group spokesman didn't respond to requests for comment.

While Mr. Thompson's tenure at Yahoo remains in its early days, his remarks provide clues as to the direction that he plans to take the company.

The executive, who was previously president of eBay Inc.'s PayPal unit and has no online-ad experience, faces an enormous task in trying to make Yahoo relevant again.

Some Yahoo employees, however, said they have been encouraged by Mr. Thompson's words and enthusiasm for changing the company.

His predecessor, former CEO Carol Bartz, was fired late last year after failing to rev up Yahoo's revenues. The company has since explored a sale of all or parts of itself and has revamped its board.

On Tuesday, Yahoo Chairman Roy Bostock said he was stepping down, along with three other board members; last month Yahoo co-founder Jerry Yang resigned from the board.

Looking beyond Yahoo's online-ad business might not produce quick results for the Sunnyvale, Calif., company. In 2011, it derived $3.4 billion, or 78% of its net revenue, from online ads.

Yahoo also generated nearly $1 billion from transaction-related fees on its auto, travel, shopping and other sites, where it takes a commission from the sale of products or services. Profit margins in e-commerce tend to be lower than those for online ads.

Mr. Thompson appears to have set his sights on non-ad revenue sources early on. Last month, he said publicly that he plans to exploit the data that Yahoo has collected on the hundreds of millions of people who visit its email, news, sports, and other websites every month.

Such information is the "single most underrated, underappreciated and underused asset" at the company, he said in a conference call with analysts.

Sameet Sinha, an Internet analyst at B. Riley & Co., said one way for Yahoo to get closer to people's "purchase decisions" and take a cut of transactions would be to acquire a company such as Bankrate Inc., which helps consumers find mortgages or other investments; Angie's List Inc., which publishes reviews of contractors, doctors and other service providers; Yelp Inc., which also provides information on local businesses; or Trulia Inc., which helps people search for real estate.

Among his other efforts, Mr. Thompson has invited private-equity firms Silver Lake Partners and TPG—which had expressed interest in taking a minority stake in Yahoo—as well as McKinsey & Co. and Boston Consulting Group, to company headquarters to hear their views about the company's direction, said a person familiar with the matter.

Representatives of Silver Lake, TPG, McKinsey and BCG all declined to comment.

Mr. Thompson may shake up Yahoo in other ways. He is considering potential candidates to join his executive team.

And he has indicated that the company could make layoffs, people familiar with the matter said. Yahoo had 14,100 employees at the end of 2011, up 4% from a year earlier, though it has weathered years of brain drain.

As he digs into the company, Mr. Thompson may have to make some more tough decisions.

People familiar with the situation said he is evaluating whether to continue buying up advertising-technology companies to compete with Google in selling graphical online ads through automated systems, a field in which Yahoo has lagged behind.

Mr. Thompson and Yahoo's board also are continuing to grapple with Yahoo's valuable stakes in two Asian companies, Alibaba Group Holding Ltd. of China and Yahoo Japan, and are negotiating with its partners in those companies to shed some of its holdings as part of a complex asset-swap deal valued at roughly $17 billion, people familiar with the matter have said.