Yahoo sees USD 440 mn loss, 'progress' on strategic review
San Francisco, July 19: Yahoo said its loss in the second quarter widened to USD 440 million from USD 22 million a year earlier, while offering no definitive news on efforts to sell its core Internet business.
"Our board has made great progress on strategic alternatives," chief executive Marissa Mayer said in a statement that contained no clues on a widely speculated bidding process for the key assets of the faded Internet star.
Revenue rose slightly to USD 1.3 billion from USD 1.24 billion a year earlier, the company said.
The results reflected its "lowest cost structure and headcount in a decade," Mayer said. "We continue to make solid progress against our 2016 plan. Through disciplined expense management and focused execution, we delivered Q2 results that met guidance across the board and in some areas exceeded it."
But Yahoo's future is far from certain, amid intense speculation about efforts to sell its main assets. The company has been pursuing its strategic review amid pressure from shareholders to salvage what is left of a company that was once a leader in the online space but has been overtaken by Google and Facebook.
In April, Yahoo averted a proxy battle for control of the company with a compromise that added four new board members, including a hedge fund chief who has been critical of management. The deal was reached with Starboard Value, which had launched a bid to replace the entire board of the Internet giant.
We continue to make solid progress against our 2016 plan, says Mayer
Yahoo has not commented on any specific bidders for the core business, but much of the speculation centres around Verizon, the telecom giant which recently acquired another faded Internet star, AOL.
In February, Yahoo said it was cutting 15 per cent of its workforce and narrowing its focus as it explored "strategic alternatives." Mayer has simultaneously been working to revive growth and made priorities of what she refers to as "Mavens" -- mobile, video, native advertising and social media.
According to the research firm eMarketer, Yahoo will earn just 1.5 per cent of net digital ad revenues worldwide this year, down from 2.1 per cent in 2015. The company is not only losing share of the market, but is also raking in fewer ad dollars in absolute terms, according to the research firm.
BGC analyst Colin Gillis said in a research note last week that Yahoo's core assets would be sold for relatively little. "We expect any offer in the range of USD 5-plus billion should be accepted by the Yahoo board to bring the process to a close," he said. "We expect bids may land in the USD 6 billion-plus range... Yahoo is over in our eyes."