Yahoo Finds Profit In Mobile, Social, Native, Video

Yahoo, which expects to hand its advertising business to Verizon Communications soon, reported Tuesday that based on GAAP accounting practices in the third quarter, ended September 2016, revenue came in at $703 million compared with $516 million for the third quarter of 2015.

Verizon plans to combine Yahoo’s search, email and messenger and advertising technology tools with its AOL unit, which it began the process to acquire earlier this year for $4.4 billion.

Excluding the impact of the Change in Revenue Presentation, which contributed $258 million to search revenue in the third quarter of 2016, search revenue fell by 14% compared to the third quarter of 2015.

While the number of paid clicks fell by 22%, the price per click rose 9% compared with the third quarter of 2015.

Revenue for the quarter rose to $1.305 billion, yielding EPS of 20 cents. Revenue excluding the traffic acquisition cost was $857 million.

Yahoo's display advertising revenue fell 7%, year-over-year to $476 million, as the number of ads sold dropped by 5% -- yet it was offset by a 1% increase in the average price per ad.

Revenue from mobile, video, native advertising, and social rose to $524 million from $422 million a year earlier. Revenue from mobile rose 46% to $396 million.

As the company prepared to hand the technology to Verizon, Yahoo CEO Marissa Mayer wrote in a prepared statement that "we remain very confident, not only in the value of our business, but also in the value Yahoo products bring to our users’ lives. We take deep responsibility in protecting our users and the security of their information. We’re working hard to retain their trust and are heartened by their continued loyalty as seen in our user engagement trends."

Yahoo did innovate during the quarter, using search to support a variety of services. It launched new mobile experiences for sports fans, including the ability to search and stream Major League Baseball games directly from within the Yahoo Sports app, and an updated Yahoo Fantasy app for iOS that makes it easier for users to navigate and manage multiple teams, the company said.

It also introduced new capabilities for advertisers through Yahoo Gemini, including search retargeting for native ads and expanded features for Gemini’s custom audience targeting solution. The goal was to make it easier for marketers to integrate their own data and increase effectiveness on search and native ad spend.

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