Last May I wrote Whither Yahoo! bemoaning the fate of this once great company. In July we wrote Yahoo poaches Google exec for top job when Marissa Mayer joined. Yahoo was a company that had been largely written off. My colleague, John O’Brien ended his post “Yahoo! needs to take bold action to turn things around. Mayer’s appointment, albeit high risk, could also re-introduce that early days buzz at Yahoo! that has been sorely missing”.
Well, although these are very early days, the buzz certainly has returned. Yesterday, Yahoo reported Q4 results which beat expectations. Search revenues grew by an impressive 14% to $427m. This was the best search result for about three years. Overall revenues were up 4% at $1.2b. Net earnings per share were 32c compared to the 28c analysts expected. And, remember, Yahoo still gets 700m visitors each month.
Yahoo Mail usage was up 10% and the Flickr iPhone App increased photo viewing by 25%. But, on the downside, Display advertising (which constitutes c40% of Yahoo revenues) was disappointing. Mayer warned "While the road to growth is certain, it will not be immediate". Well, that’s confidence for you!
I am a long-term Yahoo Finance user – it is still the best free service around. So, applying my share buying maxim of favouring the services and products I use, I bought into Yahoo when Meyer was appointed last July. I have been rewarded with a near 30% rise since – and another 3% in after-hours trading last night. Would have been even higher had not Yahoo warned of an ‘investment phase’ ahead.