Yahoo! did finish ahead of Wall Street's bottom-line expectations in its quarterly report last night. Dig a little deeper, though, and you'll soon realize that the fading dot-com star hasn't done enough to reverse course.
For example, a revamped online presence can work wonders for a company, as Microsoft
Let's start with the earnings report. Revenue before traffic acquisition costs fell by a sharp 16%. Google had to cope with the same headwinds of having advertisers pay less for their online clicks, but at least it made up the difference in volume to grow its top line during the period.
Net income inched slightly higher at Yahoo!, but it can thank the near tripling of the "other income" line item for that. Operating profits at Yahoo! fell by a sharp 25%. If you think that's bad, check back in three months. Yahoo! sees a sequential decline in operating profitability for the current quarter.
The homepage redo also bears downplaying. The new page is an interactive playground of custom-tailored apps, hyperlocal news, and social-networking tools, but isn't Google's allure its plain-screen simplicity? The only reason we're even talking about portal combovers is that Microsoft hit it out of the park with Bing. Before that, did anyone really care what Time Warner's
Bing was a freshly repurposed search engine, bumped into prominence by a massive marketing campaign. Yahoo! still has a long way to go on that and all other fronts.
Investors should give CEO Carol Bartz some time. This is only her first complete quarter. If she is going to work the same kind of growth magic that she ushered in at Autodesk
Bartz doesn't get a free pass, though. She will also have to work harder.
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