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Yahoo’s financial news simply doesn’t show improvement, no matter how hard the company works and how many people it lays off to stay in the black. To note, about 1,700 jobs out of a total full-time staff of 11,000 are currently being liquidated at the Sunnyvale, Calif.-based Internet pioneer.
The company said April 19 that its overall business continued to deteriorate in the first quarter of 2016, reporting that its revenue slipped 11 percent to $1.09 billion, with a net loss of $99 million, or 10 cents a share. This was in contrast to year-ago income of $1.23 billion and profit of $21 million.
Quarter to quarter, Yahoo’s revenue slipped quite a lot. The company brought in $1.27 billion in Q4 2015.
The news, however, wasn’t all bad, when analyzed through certain filters. After paying advertising partners for traffic, Yahoo’s revenue actually exceeded Wall Street analysts’ projections. Yahoo shares were up slightly in after-hours trading at $36.70 at 4 p.m. PDT.
Mavens revenue (revenue from mobile, video, native advertising and social sources) represented 33 percent of traffic-driven revenue in the first quarter of 2015, and increased to 38 percent in the first quarter of 2016.
Despite the negative numbers, CEO and Board of Directors member Marissa Mayer kept a brave public face.
“I’m pleased that we delivered Q1 results in line with our expectations. Our 2016 plan is off to a solid start as we continue to focus on driving efficiency, lowering costs and improving long-term growth,” Mayer said on the conference call to analysts and journalists. “In tandem, we made substantial progress toward potential strategic alternatives for Yahoo. Our board, our management team and I are completely aligned on this top priority for shareholders.”
The disappointing earnings report now puts more pressure on the company to find a buyer quickly for its Internet operations.
Yahoo’s board launched an auction of its core business in February after it put aside plans to spin off its stake in Chinese e-commerce giant Alibaba Group Holding Ltd. That $30 billion part of the Chinese retail giant was a deal engineered by co-founder Jerry Yang a decade ago and today serves as one of Yahoo’s biggest assets.
The company also owns a major stake in independently traded Yahoo Japan; in total, the company’s Asian assets total nearly $40 billion.
The first bids for Yahoo’s core Internet business were due April 11. Verizon Communications, the telecom company that owns AOL, has been seen by analysts as the leading contender. AT&T is also a potential buyer; Time Inc. dropped out of the process this week.
A special subset of Yahoo’s board of directors is currently sorting through the early offers to decide which to call back.
Activist hedge fund Starboard Value LP, which owns 1.7 percent of Yahoo, launched a proxy fight last month in an attempt to overthrow the entire board of Yahoo. Starboard has a slate of nine nominees that it wants to replace the current Yahoo board. You can read the March 24 letter it sent to shareholders here.