Earnings Call: Yahoo To Spend On Branding; Plans To Cut Frequency Of Ads On Some Sites

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It looks like Yahoo (NSDQ: YHOO) has settled on a new mantra — “to be the center of people’s online lives” — and during the company’s earnings conference call Tuesday, CEO Carol Bartz announced several initiatives designed to fuel that vision. She talked up the company’s new home page which launched Tuesday and also said the company would be spending heavily on branding initiatives, starting this quarter. Yahoo will also be cutting the number of ads it runs on some of its sites and possibly eliminating ads entirely from others in order to improve the user experience. “Users are put off (by) irritating ads,” Bartz said.

As for the company’s weak quarterly results, Bartz put a positive spin on them, saying that “considering the economy, I’m pleased.” She said, however, that it was too early to call a bottom in the ad market. “Overall, we are seeing less fear in the marketplace,” she said. “It’s easy to assume it’s bumping along the bottom. There’s just so much conflicting information in the market.”

There was no word on the elephant on the call — the possibility of a search partnership with Microsoft (NSDQ: MSFT) — although when asked about Bing, Bartz said Microsoft “should be given kudos” for its relaunched search engine. “I think Bing is a good product, it expands experimentation around search and how people use it,” she said.

Some highlights:

Employment: Yahoo cut five percent of its workforce during the quarter, but new CFO Timothy Morse said that the company would be adding employees to its sales force. The company is also adding engineers. “We had too few engineers, too many people planning products,” Bartz said.

Entertainment: Bartz said that the company was adding entertainment as a “global priority” in addition to its other core verticals, like sports, finance, and news.

Display: U.S. display sales were down 11 percent, while international display sales dropped 20 percent. However, Morse said the decline would have only been 5 percent if currency rates had been the same. He said most categories had declined.

Search: Morse provided some additional details on the company’s search business, saying that while query volume grew 9 percent, search revenue was down in the U.S. and abroad due to declining revenue per search.

Is the scale of the search business a problem? Bartz said “of course” but she said Yahoo’s volume of queries was fine. “We have to continue to … convince those buyers to get off their chairs,” she said.

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