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Yahoo Nails Q1 Earnings, But Scaring Off Microsoft Appears to Hurt Share Price

As expected, Yahoo pulled out all the stops to try and impress Wall Street with its first quarter earnings.

Just about any way you dice it, Yahoo saw an increase:

  • Revenues were $1,818 million for the first quarter of 2008, a 9 percent increase compared to $1,672 million for the same period of 2007.
  • Marketing services revenues were $1,572 million for the first quarter of 2008, a 7 percent increase compared to $1,469 million for the same period of 2007.
  • Marketing services revenues from Owned and Operated sites were $966 million for the first quarter of 2008, an 18 percent increase compared to $820 million for the same period of 2007.
  • Marketing services revenues from Affiliate sites were $606 million for the first quarter of 2008, a 7 percent decrease compared to $649 million for the same period of 2007.
  • Fees revenues were $245 million for the first quarter of 2008, a 21 percent increase compared to $203 million for the same period of 2007.

What’s interesting is that unlike Google–which saw much of its revenue growth from international advertising–Yahoo saw its strength from the US.

  • United States segment revenues for the first quarter of 2008 were $1,307 million, a 19 percent increase compared to $1,101 million for the same period of 2007.
  • International segment revenues for the first quarter of 2008 were $510 million, an 11 percent decrease compared to $571 million for the same period of 2007.

According to Reuters, Yahoo came in on the high-end of expectations:

Excluding one-time items and stock compensation costs, the beleaguered Internet company reported a profit of $150 million, or 11 cents per share.

On that basis, Wall Street on average was looking for a profit of 9 cents per share, compared with 11 cents a share a year earlier…

The only problem? Yahoo’s stock is down in after-hours trading. Were investors hoping for a poor quarter so that Microsoft wouldn’t need to raise its offer? Does the after-hours drop suggest investors believe the deal will no longer happen?

  • Jordan McCollum

    Poor Yahoo. Can’t win for losing. I thought we were supposed to be rooting for the underdog.

    But hey, WTG on fooling people.

  • http://widestep.com Keylogger Guy

    “Were investors hoping for a poor quarter so that Microsoft wouldn’t need to raise its offer? Does the after-hours drop suggest investors believe the deal will no longer happen?”

    Seems to be true. Personally I don’t be happy if Microsoft will acquire Yahoo, the less “monopolistic giants” are on the market the better for us.

  • http://www.greatpriceshere.com Nicole

    This is sure to make the battle messier and longer.

    Nicole’s last blog post..Need a New Computer?

  • http://www.thevanblog.com Steven Bradley

    I was surprised when I saw the stock go down, but I think you may be right people were hoping they’d tank so the sale would go through.

    I’m still hoping Yahoo can remain independent. I don’t really see how the combined companies are going to be any more of a challenge to Google and if anything I see Microsoft ruining the things I still like about Yahoo.

    Steven Bradley’s last blog post..Update On Domain Move

  • http://www.seoresults.co.za Web Marketing Man

    The figures are robust, suggesting Yahoo! is strong like mother russia…jokes aside, these gains are most all in the US market, which is pretty saturated. International growth would ultimately be a better indicator of longer term viability. What is Yahoo’s market penetration in China? Here in South Africa Yahoo does poorly, my monthly analytics show maybe 2% of organic traffic from Yahoo, vs 95%+ from Google.