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Yahoo gains in potential but not in revenues: Q2 2013 report

Its time for Yahoo investors to take a sit back and analyze the recent release of Q2 earnings report. With Yahoo’s CEO Marissa Mayer completing one year, the report reveals a 7% decrease in revenue at $1,135 million as compared to $1,218 million in Q2 previous year.

The Revenue excluding traffic acquisition costs (“revenue ex-TAC”) was $1,071 million for the second quarter of 2013, a 1 percent decrease compared to the second quarter of 2012. The report also highlights a 12% decrease in price per ad and a 2% decrease in number of ads sold, showing a fall in revenues in the online advertising as compared to its major competitors, Google Inc. and Facebook.

Although, the company reported $137 million as the income from operations, a 150% increase over previous $55 million in Q2, 2012, its been said that most of this income is from revenue generated by Yahoo holdings in China’s Alibaba and in Yahoo Japan. Thus, showing no role of Marissa Mayer as these were held long before she joined the company.

Marissa Mayer though brought a lot of activity to the Yahoo’s platform in the past quarter, thus feeling encouraged by the Q2 performance.

Of the total 17 recent year acquisitions, the major 9 were done only in the past quarter including the $1.1 billion acquisition of social blogging platform Tumblr. As most of the acquisitions surround mobile app market, Marissa has given Yahoo, the required thrust to continue its position in the game.

As per Mayer, a quarter of a million new blogs are being set up each day on Tumblr and daily active users are up 120% across mail applications. She also hints at Tumblr integrations into Yahoo products in the future.

With new versions of Yahoo home page, email, flicker and newer tablet & mobile versions, Yahoo is now walking at an entirely new pace. Daily uploads have increased by a factor of three since Flickr refresh. With the new Yahoo billboard ads and partnership with Broadway and NBC, Yahoo moves are cleared to deliver better entertainment to users and increased effectiveness to advertisers.

The Q2 has added more potential opportunities for Yahoo towards its future growth.  As per the analysts, Marissa has put Yahoo back on the map in terms of being a player, in terms of hiring, technology, acquisitions. But it’s still too early to classify what she’s done, can it put Yahoo back in map for revenues.

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