Yahoo's fourth-quarter revenue slides as ad prices dip again

Tue Jan 28, 2014 6:43pm EST
 
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By Alexei Oreskovic

SAN FRANCISCO (Reuters) - Yahoo Inc's YHOO.O online ad prices slid again in the fourth quarter and Alibaba, the Chinese e-commerce giant in which it owns a big stake, saw revenue growth decelerate from its recent rip-roaring pace.

Overall revenue fell 6 percent in the last three months of the year to $1.266 billion, marking four consecutive quarters of eroding revenue. The company said that prices for both online display ads and search ads declined in the fourth quarter.

The company's shares were down 5.8 percent at $36 in after-hours trading on Tuesday.

"Normally you get better pricing in Q4," said BGC Partners analyst Colin Gillis. "The core business is shrinking."

Yahoo's efforts to revamp its slumping business have come to the forefront following Chief Executive Officer's Marissa Mayer's decision to fire Chief Operating Officer Henrique de Castro this month, after only slightly more than a year on the job.

The move marked the first major change of plans since Mayer took the helm in July 2012, and underscored Yahoo's ongoing challenge to rekindle revenue growth.

Mayer has moved aggressively to kick-start the company with product makeovers, acquisitions and big media hires, including celebrity newswoman Katie Couric. But the ad sales business continues to struggle at a time when rivals such as Google (GOOG.O: Quote), Facebook (FB.O: Quote) and Twitter (TWTR.N: Quote) are posting strong revenue growth.

Yahoo's quarterly results also included some of Alibaba's financial results from the third quarter because it owns about 24 percent of that company.   Continued...

 
The Yahoo logo is shown at the company's headquarters in Sunnyvale, California April 16, 2013. REUTERS/Robert Galbraith