If the first six publicly traded quarters at
Google (
Nasdaq: GOOG ) have left you rattled, given the company's knack for either beating or missing analyst targets on a
double-digit percentage basis, maybe
Yahoo! (
Nasdaq: YHOO ) might be more up your alley.
Analysts were expecting Yahoo! to earn $0.11 a share on $1.1 billion in revenue before traffic acquisition costs last night. Guess what? That's exactly what the company produced.
Dig deeper into the numbers, and you'll find mixed results at the popular portal. Even if you add back stock-based compensation -- which may be a stretch after learning that Yahoo! executives cashed in $300 million in stock options last year -- it's disappointing to see how margins eroded all the way down to the bottom line.
In other words:
Search long enough, though, and you'll find some more upbeat metrics. For instance, even though Yahoo! page views grew by 24%, its average revenue per page view rose by 10%. That's the kind of healthy piggybacking that bodes well for the industry in general and Google's report later this week.
Yahoo! also is now attracting a half-billion unique monthly visitors worldwide. That's roughly half the global Internet-surfing audience. Even though paid search continues to be the key driver here, the company finished the quarter with a 49% year-over-year improvement in unique paying relationships. 13.3 million users are now paying customers through the various Yahoo! services, and the company expects that sum to exceed 16 million users by the end of the year.
The company is also redesigning its sponsored-search platform. With Google still strong and Motley Fool Inside Value pick Microsoft (Nasdaq: MSFT ) slowly rolling out its AdCenter offering, it's an important move. Yahoo! can't rest on its pioneering laurels here after acquiring Overture a few years back.
With Microsoft allowing advertisers to bid as little as a nickel for keyword-based clicks, and Google lowering its minimum to as little as a penny for qualified ads, it may be just a matter of time before Yahoo! abandons its $0.10-per-click minimum.
In short, Yahoo!'s results were on target, which should relieve shareholders who've seen the stock tumble from its peak of $43.66 back in January. Simply meeting projections would have been dangerous to higher-octane growth stocks, but it's just what Yahoo! needed at this point.
Yahoo! was boring this time around, but these days, that's actually a good thing.
Longtime Fool contributor Rick Munarriz is a frequent Yahoo! visitor, but he has yet to use the company's voice service. He does not own shares in any of the companies mentioned in this story.The Fool'sdisclosure policy is worth searching for. Rick is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
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