Yahoo just reported Q3 revenues. The company said that it earned $1.094 billion in revenue, which was up a modest 1 percent compared to a year ago. This beat Wall Street expectations; analysts had anticipated an overall revenue decline.
The company also reported that mobile revenues were “now material” and exceeded $200 million for the quarter. For the year Yahoo projected more than $1.2 billion in mobile ad revenue, which is both a surprise and a bright spot for the company.
Search revenues overall were up while display was down. Search revenue (ex-TAC) in the quarter was $450 million, which was an increase of 6 percent year-over-year. However display revenue (ex-TAC) was down 6 percent to $396 million vs. last year.
Yahoo said that it sold 24 percent more display advertising than in Q3 2013. However the price per ad was down an equivalent 24 percent.
In terms of search, Yahoo reported that paid clicks were flat vs. Q3 2013. Conversely click prices went up 17 percent compared to a year ago. This stands in contrast to Google which said that CPC prices were down 2 percent in Q3.
Yahoo also reported that it had $12 billion in cash and cash equivalents on hand as of September 30, 2014. Most of this is from the sale of Alibaba shares earlier this month. After taxes it will have more than $6 billion from the deal. As much as half of that may be returned to Yahoo shareholders.
As Yahoo’s display business flatlines, CEO Marissa Mayer has been under increasing pressure to generate top-line revenue growth. I speculated yesterday about how she might generate that through mobile, video or other ad-revenue acquisitions. And last night TechCrunch reported a rumor Yahoo is seeking to buy video ad platform Brightroll for $700 million.
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