Marissa Mayer's Star Is Dimming
NEW YORK (TheStreet) -- Yahoo!'s
Yahoo! reported first-quarter non-GAAP earnings of 38 cents per share on $1.14 billion in revenue, excluding traffic acquisition costs. Including TAC, sales were $1.07 billion, missing estimates. Analysts polled by Thomson Reuters expected Yahoo! to earn 24 cents per share on $1.099 billion in revenue for the first quarter.
The company noted display revenue ex-TAC was $409 million for the first quarter of 2013, down 11% year-over-year. Search revenue ex-TAC was up 6% year-over-ear to $402 million, but price-per-click (PPC) fell 7% annually, as mobile ads continue to monetize at a weaker rate than desktop.
Mayer noted that Yahoo! is really positioned well to take advantage from the growth in mobile, particularly tablets. Poor monetization from mobile, however, isn't demonstrating Yahoo!'s strengths right now. As such, investors remain in a wait-and-see mode, says UBS analyst Eric Sheridan. "We remain skeptical that investors will see an inflection in the core business (especially pricing of Display & Search products) in the medium term," Sheridan wrote in his note. He rates shares "buy" with a $27 price target.
Now is the time where recent acquisitions such as Summly, Jybe, Snip.It and Alike start to pay off. Mayer has talked about mobile and personalization as two of Yahoo!'s keys to its future. We saw a little of what Summly had to offer last night, as it condensed Mayer's 2,000 word earnings script into 140 words.
The company's search deal with Microsoft