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Yahoo’s Bartz Acknowledges ‘Issues’ In Search

Yahoo (NSDQ: YHOO) CEO Carol Bartz acknowledged during the company’s earnings call Tuesday that the company’s search operations were “encountering some issues,” saying that the company’s search alliance with Microsoft (NSDQ: MSFT) was not yet producing the revenue per search Yahoo had hoped for. But Bartz said she was “confident” that would change and she was “very confident” the company was headed in the right direction, listing a series of what she called “proof points” that Yahoo was turning around.

Page views on the company’s media sites, she said, were up 8 percent during the quarter, while minutes spent were up 17 percent; the company’s “other” revenue, which includes operations like Yahoo Small Business, Bartz said, should be growing by year-end; and a growing number of the company’s sites are now on its new content platform.

Some additional highlights:

— Search: Bartz said that many of the company’s biggest search advertisers were spending “multiples” of what they had been spending previously now that Microsoft was powering both search ads and results on Yahoo’s search engine. She blamed lower revenue per search on Microsoft’s adCenter platform, which she said had “technical limitations.”

–Display: Executives said they expected the company’s display revenue would increase in the “mid-teens” this quarter. Bartz said the rise was due to increasing user engagement with Yahoo sites.

–Video: Asked about the company’s plans for video, Bartz said Yahoo was not interested in user-generated content but rather in “snacks,” which she described as “shows that become very very viral.” She said it was possible that the company could eventually have some “longer form video.”

–Asian investments: Some analysts had expected the company to provide an update on its strategic plans for its stakes in Alibaba and Yahoo Japan, especially considering recent reports indicating that the company was in advanced talks to sell its 35 percent stake in Yahoo Japan to SoftBank which already owns about 40 percent of that company. But CFO Tim Morse would not comment, only saying “we continue to make progress.”