Yahoo! posts 8% jump in Q2 profit; revenues fall 13%

Internet major Yahoo! has reported 8 per cent rise in net income to $141 million in the second quarter ended June 30 this year, as the cost cutting measures taken by the company seemed to be paying off.

In comparison, the company had a net income of $131 million in the corresponding year ago period, Yahoo! said in a statement.

However, the company's revenues declined to 13 per cent to $1.57 billion in the latest quarter from $1.79 billion in the June quarter of 2008.

The company's marketing services revenues from owned and operated sites were $858 million for the second quarter of 2009, a 16 per cent decrease compared to $1.01 billion for the same period of 2008.

The decrease was driven by a 15 per cent decline in search advertising revenue and a 14 per cent decline in display advertising revenue, the statement said.

Market analysts said that the despite the slackening online ad revenues the company managed to post a rise in profits as the cost cutting measures, including the layoff of five per cent workforce, taken by it may have started to pay off now. "I am pleased with our results this past quarter. We established a clear, simple vision to be the centre of people's lives online, and we are backing that vision with important initiatives to create 'wow' experiences for our users," Yahoo! Chief Executive Officer Carol Bartz said.

Yahoo! registered a revenue from its affiliate sites of $520 million for the second quarter of 2009, a nine per cent decrease compared to $571 million for the same period last year. The decrease was driven primarily by a shift to lower yielding inventory.

"Even in this challenging economic environment, Yahoo! had a solid quarter, reflecting the strength of our offerings for our users and advertisers," Yahoo! Chief Financial Officer Tim Morse said.

Along with the results, Yahoo! unveiled its new homepage, which makes it easier to users to access content.

The new homepage brings together the best tools and content from across the Web, combined with leading content and services from Yahoo! properties, to give people one place to access the things that matter to them most.

Besides, the new Yahoo! homepage is available in the US and would roll-out in France, India, the UK, and on mobile devices over the coming week, the statement added.

"Our new homepage is a perfect example of our efforts to create innovative products aimed at increasing user engagement while offering the most compelling advertising proposition in the industry," Bartz said.

Yahoo!'s cash, cash equivalents and investments in marketable debt securities were $4.19 billion at June 30, 2009 compared to $3.52 billion at December 31, 2008, an increase of $675 million.

"During the second quarter of 2009, the company recorded a $65 million net restructuring charge for real estate facilities exited, changes in sublease income estimates for previously exited facilities, write-off of property and equipment for exited facilities, and personnel severance and related costs offset by a reversal of stock-based compensation expense for forfeited awards," Yahoo! said.

In its outlook for the third quarter of 2009, the internet major said it expects $1.45 billion to $1.55 billion revenue. The company projected its income from operations in the range of $55 million to $65 million.

For the first half of 2009, Yahoo! posted a net income of $259 million as compared to $668 million in the same period last year. Revenues decreased to $3.15 billion for six months ended June 30, 2009 from $3.61 billion in the year-ago period.