SAN FRANCISCO — Unable to revive Yahoo’s revenue growth on her own, chief executive Marissa Mayer is hoping for a little help from her old friends at Google.
Mayer, a top Google executive until she defected to Yahoo in 2012, said the two companies had reached a three-year deal to work together in Internet search and advertising. The pact was unveiled after Yahoo released a disappointing report on its third-quarter performance.
The numbers disclosed Tuesday showed Yahoo’s revenue, after paying ad commissions, dropped 8 percent from the same time last year to $1 billion.
It marked the ninth time in the past 11 quarters that Yahoo’s net revenue has declined or remained unchanged from the previous year. The ongoing erosion has magnified worries that the Internet company will be stuck in a financial sinkhole after spinning off its lucrative stake in China’s Alibaba Group.
Mayer is still promising to boost revenue and now it appears Google — the Internet’s most profitable company — may play a key role.
This is Yahoo’s second attempt to lean on Google’s expertise in Internet search and advertising.
Yahoo Inc. tried to team up with Google Inc. in search during 2008 as part of its defense against a takeover attempt by Microsoft Corp. The Google alliance unraveled after the Justice Department threatened to block the partnership on the grounds that it would thwart competition.
After being rebuffed, Yahoo wound up negotiating a deal to rely on technology from Microsoft’s Bing search engine. Yahoo will still use Bing, but will also mix in results from Google’s search engine if it can win antitrust approval of its new deal this year.
It may be easier to gain the government’s approval this time because Yahoo’s share of the Internet search market has shrunk during the past seven years.
Google’s search engine, though, still processes about two out of every three search requests in the United States, roughly the same volume as it did when the Justice Department originally objected to a Yahoo partnership.
While awaiting clearance to team up with Yahoo, Mayer is pledging to trim the company’s expenses as revenue declines, and concentrate the remaining workforce on fewer products.
‘‘We see a unique moment and opportunity for Yahoo as we move into 2016 to narrow our strategy and focus on fewer products with higher quality to achieve better growth and better results,’’ Mayer said during a review of the third-quarter results.
She promised to elaborate on her plan by the time Yahoo releases its fourth-quarter results in 2016.
The Sunnyvale, Calif., company is expecting another tough time in the current quarter ending in December.
Revenue, after ad commission, is expected to range from $920 million to $960 million, an 18 to 22 percent decline for the previous year.
No comments:
Post a Comment
Please leave a comment-- or suggestions, particularly of topics and places you'd like to see covered