Yahoo 'for sale' sign looms over earnings
The Internet giant slightly beat Wall Street's expectations when it announced its financial results Tuesday. The problem is that nobody cares much about those numbers anymore.
Instead, the once-mighty Web portal-turned-media company is overshadowed by intrigue over its broader fate. Not too long from now, Yahoo, founded in 1995 by Stanford students Jerry Yang and David Filo may no longer exist.
It could be bought. It could be chopped up for parts. It could be renamed.
And that's why today's financial report is only interesting because of what CEO Marissa Mayer is or isn't saying about the possible sale of Yahoo.
"We made substantial progress towards potential strategic alternatives for Yahoo," Mayer said in statement. "Our board, our management team, and I are completely aligned on this top priority for shareholders."
"Strategic alternatives" is investor-speak for a possible sale. For the past two months, Yahoo has been shopping itself around. Properties like Yahoo Mail, Yahoo Sports, Yahoo Finance and all the other stuff we think of as Yahoo may soon be bought. Monday was the deadline for first-round bidders, and suitors reportedly include Verizon, YP -- formerly YellowPages.com -- and private equity firms like TPG.
Amid the gossip about who wants to buy what, Yahoo is still running a business, albeit one in decline. Sales fell to \\$1.087 billion from \\$1.22 billion a year ago. The number was roughly in line with analyst estimates. The company also beat profit expectations. Profit, minus some costs, was 8 cents a share. Analysts were hoping for 7 cents a share.
That financial snapshot is inside baseball, but what those numbers may point to is how much work a potential buyer will have to do to make Yahoo a winner again. Granted, Yahoo is still one of the most popular destinations on the Internet. It's the third most-trafficked site on the Web, after Google and Facebook, according to ComScore.
But Yahoo hasn't found a way to make much money off of all that traffic. When it comes to display ads -- Yahoo's prime money maker -- Facebook and Google dominate. They will combine for almost 40 percent of the market worldwide this year, according to eMarketer. Yahoo is expected to take 1.7 percent.