Yahoo Earnings Fall Short of Expectations
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Written By Kate Zimmermann | April 18, 2007 | Share This
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The results for Yahoo’s first quarter earnings are in - Yahoo’s profits, despite Panama, are down 11 percent. International revenue continues to grow, but US revenue has reached a peak around 1.1 million (per quarter). Page views and overall revenues are both up by 22% and 7% y/y respectively, but the difference in site growth vs. revenue has led some analysts to speculate that Yahoo isn’t properly monetizing its content. According to ComScore, Yahoo’s market share from February to March also declined, from 28.1 percent to 27.5 percent. Yahoo was the only top five search engine to lose market share month-over-month.
The Wall Street Journal and the New York Times blame the performance decline on over-hyped expectations for Panama. From the NYT, “The results, announced after the close of trading, were in line with the company’s own forecasts but they fell short of analysts’ expectations and disappointed investors, who sent Yahoo shares tumbling nearly 8 percent in after-hours trading.” BusinessWeek, on the other hand, questions Terry Semel’s leadership,
“The news erased much of the goodwill that investors have felt toward Yahoo, thanks to what appears to be a successful launch of the Panama search advertising software, and had some analysts openly speculating whether this would be the end of Semel’s tenure. “The writing is on the wall,” wrote Jackson Securities analyst Brian Bolan, speculating that CFO Decker could soon take the helm. “Another quarter with a bottom-line miss will be the last one for Semel.”"
Given that Yahoo forced Panama migration just this past February, it may be too soon to properly assess its impact. No less, Panama’s over-hype can perhaps be attributed to the fact that there’s been little else for analysts to look to as a forecast for growth. If Panama doesn’t deliver in the 2nd quarter, as promised, Terry Semel will have more than one angry investor demanding an explanation.
Topics: Yahoo! |