Yahoo’s new CEO, Marissa Mayer, seems to be doing well at the helm of the troubled company. For the second quarter since her appointment, Yahoo has delivered strong results. Yahoo recorded its first revenue growth in the past four years. It looks like Yahoo may finally be on course to a positive turnaround.
Yahoo’s (Nasdaq:YHOO) Q4 revenues grew 4% over the year to $1.22 billion, ahead of the Street’s target of $1.21 billion. EPS grew 28% to $0.32 and was also ahead of the market’s projected earnings of $0.28. The company ended the year with revenues growing 2% to $4.468 billion and earnings reporting growth of 3% over the year.
By segment, search revenues grew 14% to $427 million. Display revenues remained an area of concern as revenues slipped 5% over the year to $520 million.
During the quarter, the company bought back 80 million shares at a cost of $1.5 billion.
For the current quarter, Yahoo projects revenues of $1.07 billion-$1.1 billion, missing the Street’s projections of $1.12 billion. Yahoo expects to end the current year with revenues growing marginally to $4.5 billion-$4.6 billion.
Yahoo’s Mobile Focus
Yahoo is convinced it needs to improve its mobile strategy to help drive growth. During the last quarter, it acquired Stamped, a nine-employee startup that offers a mobile recommendation app. Stamped had an iPhone and web app that lets users keep track of and share the things they like with their friends, such as restaurants, books, films, and other apps. Details of the transaction were not disclosed. The acquisition was made to help Yahoo deepen its mobile talent pool.
A second acquisition was video chat startup OnTheAir, also for an undisclosed sum. OnTheAir was known for its video chat broadcasting app that lets friends chat and content producers webcast single or split-screen interviews. The app let users set up webinars, and host video call-in-shows that can be streamed live to a wider population. OnTheAir’s five-member team will join Yahoo and help them develop mobile communication apps.
On its own as well, Yahoo has been improving its mobile apps. For instance, it released an upgraded Flickr iOS app that was named the best mobile photo app by Forbes Magazine. Since the release of the new iOS app, the number of photos uploaded through the app has increased by more than 25%. In the last quarter, mobile adoption for Yahoo sites grew to more than 200 million monthly unique users. But Yahoo is still figuring out better ways to monetize this traffic.
Yahoo’s Content Expansion
In addition, Yahoo is improving the content on its properties. Last quarter, Yahoo Sports entered into a partnership with NBC Sports. Through the agreement, NBC will be able to grow its online presence within Yahoo’s network, and Yahoo will benefit from an increased awareness of Yahoo’s sports coverage on TV. Yahoo will also be able to feature live sports coverage from NBC.
Yahoo also tied up with CBS to launch a combined version of their entertainment celebrity gossip site, omg!, with CBS’s entertainment news show, Insider. Now known as omg! Insider, the new show will feature new talent and will come with additional content, including video and breaking news, and an improved mobile version. Yahoo already has agreements with ABC for news and political coverage and CNBC for financial news and content.
Last month, Yahoo also announced the acquisition social curation site, Snip.it. The San Francisco–based startup is similar to Pinterest and lets users create scrapbooks with pictures, articles, videos, and other online content. Terms of the acquisition were not disclosed. Yahoo plans to leverage Snip.it’s ability to “that lets people share content in a social and fun way” as part of their content expansion strategy.
The market has reacted positively to Yahoo’s moves. The stock has recovered more than 30% over the past year. It is trading at $19.63 with a market capitalization of $23.22 billion. It touched a 52-week high of $20.88 last week.