Mayer ‘proud’ of Yahoo revenue climb, though profit sags

Yahoo’s revenue climbed 2 percent in the fourth quarter, though its display ad business shrank and profit was down from a year earlier.

Yahoo’s revenue for the quarter ended Dec. 31 was US$1.35 billion. Subtracting commissions and fees paid to advertising partners, revenue was $1.22 billion, an increase of 4 percent, Yahoo announced Monday.

Net income declined 8 percent to $272 million, or $0.23 per share, compared with $296 million, or $0.24 per share, in the fourth quarter of 2011, Yahoo said.

CEO Marissa Mayer said she was “proud” of the results. “We achieved tremendous internal transformation in the culture, energy and execution of the company,” she said in a statement.

Yahoo signed key partnerships in the quarter with NBC Sports and CBS Television, Mayer said, and improved its mobile apps for Yahoo Mail and Flickr, its photo-sharing service.

The quarterly figures above exclude payments Yahoo received from its sale of shares in Alibaba, a Chinese Internet company. Including those payments, on a pro forma basis, Yahoo reported income of $370 million, a 20 percent increase from the same period a year earlier. Its pro forma earnings per share was $0.32.

Display advertising revenue, after subtracting partner commissions, was $520 million for the quarter, down 5 percent from a year earlier. Search advertising revenue, on the other hand, increased by 14 percent to $427 million.

Looking at the full year, sales for 2012 were flat at $4.99 billion, though they increased by 2 percent after subtracting advertising fees and commissions. It was the first time in four years that Yahoo’s annual revenue had increased by that metric, Mayer said.