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Yahoo: Revenues Slightly Down, Investors Await Words Of Wisdom From New CEO

In its first earnings announcement since recently appointing Scott Thompson as its new CEO and the seeing off founder Jerry Yang, Yahoo (NSDQ: YHOO) today reported Q4 revenues of $1.169 billion, down three percent on the same quarter last year.

Those revenues were slightly lower than the $1.19 billion expected by analysts polled by none other than Yahoo Finance.

Earnings per share stood at 24 cents — exactly the same as Q4 2010, and in line with analysts’ expectations. That probably comes as some relief to investors, considering all the turmoil the company has seen in the past year: changes have included a new CEO, numerous executive departures, an overhaul of its advertising system to partner up with Microsoft (NSDQ: MSFT) and AOL (NYSE: AOL), and continuing loss of market share in both display and search to other competitors like Google.

The numbers and business situation of Yahoo couldn’t be more different from Apple (NSDQ: AAPL), which also reported earnings moments ago with sales of $46 billion for the quarter.

Some of the particulars from the Yahoo’s results release:

— Display revenue was $612 million, a four percent decrease compared to $635 million for the fourth quarter of 2010. For the full-year they were actually slightly up: $2.16 billion compared to $2.15 billion in 2010.
— Search revenue was $465 million, down a massive 27 percent compared to $640 million for the fourth quarter of 2010.
— North America revenue was $885 million, down from $991 million for the quarter last year.

Yahoo will be hosting an investor call to go through the earnings, and for its new CEO, Scott Thompson, to give a few more particulars about the state of the company. A call with investors and media three weeks ago when his appointment was announced were very light on specifics. We’ll update this post as that proceeds.

Update: The call is kicking off with a few words from Thompson. “I’ve validated what I believed coming in, the talent of the people and the huge opportunity ahead of us,” said Thompson. “I believe we have a lot of work to do and it’s still early.” He says that at the moment Yahoo has 702 million unique visitors worldwide. He says he will lay out the foundations for what he plans for 2012.

He says in the future he will provide more insight about the details of results covering regional differences.

“There is no question we need to do better and we will,” he says. “We need to better monetize the engagement that we have.”

Display was mainly affected by declines in the Americas — it actually grew in Asia Pacific and Europe, while declining in the U.S.

The sales force is getting overhauled, according to CFO Tim Morse. “Several major advertisers that reduced spend in 2011…have made meaningful commitments or 2012.”

Unique visitors are up by 11 percent around Yahoo’s “tent pole” events such as the Super Bowl, the Royal Wedding and others. Yahoo is putting more, Morse says, into its “editorial voice,” with the creation of original content. One recent notable announcement there is the project with Tom Hanks; another is the creation of Livestand.

Some frank and slightly depressing words that really size up not just the challenge ahead but perhaps hint at employee morale? “Despite these changes, revenue isn’t growing,” said Morse. “We expected better.”

Back to Thompson who gives a very robust pep talk for the future, which sounded very encouraging except that it’s Yahoo we’re talking about, which has been the subject of many robust speeches over the years. Some highlights:

“Our users need to use our services more frequently…We need to be a media company as well as a tech company.”

“I make decisions quickly and move fast, fast, fast. That’s how we get to playing offense rather than defense.”

“We will focus on balancing our investment resources and allocation of capital on products of today, tomorrow and long term…To strike the right balance, we need to focus on the products that are driving results today. But also the business of tomorrow. But also a small but meaningful percentage on products that will play out 12 months from now.”

“At least two fundamental building blocks customer experience and data…We want our users to spend more time with yahoo because they love what we are doing.”

“Data is the most underrated asset at Yahoo.”

“I believe our company can do much more to innovate and disrupt.”

Some questions from the analysts:

Future acquisitions?
These will be made to fill technology gaps, said Thompson.

What’s your strategy to turn around display?
Alas, no specifics but this: “We’re meeting with customers to understand why they don’t give us more of their spend. We’re after this with a real sense of urgency. Too early to say what actions we might take but full intention is to get that back and growing at a healthy rate.

Are there no sacred cows going forward? And what about premium video, any new deals?
Thompson: “I could interpret the first question in a variety of ways, as part of the work we’re doing we are understanding and evaluating all options going forward. Things we will continue, stop, and additional monetization strategies. We are being aggressive.”

Morse: “As for short-form, we had 9 of the top 10 original shows for web programing. We need to do more there (no numbers disclosed on traffic).”

What products do you think are appropriate areas for Yahoo to move into? And what about the declines in search?
Thompson: “Too early for strategic framework but we are looking at how to increase monetization.” Morse: “On search, in mobile it’s still too early on for how you monetize going forward. There is a lot yet left to evolve in mobile. I’m not concerned, I’m optimistic.” Thompson: “No winner has shown himself visible in mobile search.” (Google (NSDQ: GOOG) might beg to differ here.)