Yahoo First Quarter Results: Revenue Dips Slightly, Profits Increase

New submitter dolilmao was the first with the news of Yahoo's first quarter results. From Techcrunch: "Yahoo just released its earnings report for the first quarter of 2013, with better-than-expected (non-GAAP) earnings of $420 million, or 38 cents per share. Revenue (excluding traffic acquisition costs) was flat compared to last year, at $1.07 billion. Analysts has predicted that the company would report revenue of $1.1 billion and 24 cents EPS. Wall Street normally evaluates Yahoo on an ex-TAC basis — including traffic acquisition costs, revenue was $1.14 billion, down 7 percent from last year."

Comments

probably fired everyone

[danbuter]

If revenue is down, but profits are up, I'm betting a bunch of the long-term employees were fired, as they were the most expensive. While this will help Yahoo's short-term outlook, a few years down the road will be really bad for them.

Re:probably fired everyone

[schnell]

I'm betting a bunch of the long-term employees were fired, as they were the most expensive ... a few years down the road will be really bad for them.

Pro Tip: the employees who have been at your company the longest are not necessarily your best

.

I think the value of long-term employees often depends very heavily on your corporate culture. In the startups (or startup culture) businesses I have worked at, the longest-tenured employees have been the most valuable due to their tribal knowledge. In older, more bureaucratic companies where I have worked, the long-timers are usually the biggest obstacle to getting things done. Your mileage may vary, of course, but I wonder which category of corporate culture Yahoo! fits into?

Re:probably fired everyone

[shaitand]

That's beside the point. Nobody who sees you slash and burn your tenured staff is going to have any loyalty to the company.

This is the kind of shit that breeds every man for himself and short term thinking. How much something counts is only about how much it appears to count. Jump to the greener pasture on the other side at the first instant. Etc. Etc. It's actually bad for morale and bad for the company. Management and staff take an aggressive and hostile view of one another.

Makes for a shitty place to work and the last place anyone is going to innovate, ever.

Re:probably fired everyone

[ShanghaiBill]

Nobody who sees you slash and burn your tenured staff is going to have any loyalty to the company.

My experience is that employees know damn well who the deadwood are, and clearing them out provides a boost to morale. There is no "tenure" at technology companies, and very few tech workers have any delusional expectations about lifetime employment.

Re:probably fired everyone

[SuperKendall]

If management is so brilliant it can identify dead wood when it is forced to, why couldn't it identify dead wood before hiring them or remove them before intense negative financial pressure requires them to do so?

Have you ever worked at a company in your life?

Everyone knows who the dead wood is at a company. It doesn't take brilliance, it merely means not being blind and deaf!

The reason unproductive people can stay on so long is that managers HATE firing people, and for them it's far easier done only under duress and in large numbers. Also often the unproductive are personal friends of powerful people, and so there really has to be substantial pressure before they go.

Re:probably fired everyone

[yuhong]

In case of Yahoo, the management changed. Marissa Mayer was hired from Google.

Re:probably fired everyone

[shaitand]

"There is no "tenure" at technology companies, and very few tech workers have any delusional expectations about lifetime employment."

Only because the thinking above is pretty rampant in tech. Everyone is constantly shifting positions. By the time someone knows the lay of the land they are 5mins away from going out the door either voluntarily or not.

The industry pushes this. Things like token raises of a few percent a year. Salary adjustments for positions that only get applied to new hires. Ridiculous advancement treadmills while new hires with great resume building and interviewing skills bypass them completely. It all amounts to a company constantly bearing the expense of training new staff and while constantly watching the people with a clue walk out the door.

Re:no contribution

[danbuter]

Yahoo News is actually quite good, especially their Sports department.

non-GAAP may mean just made up numbers, eh?

[girlinatrainingbra]

non-GAAP? You mean numbers that do not use GAAP = "Generally accepted accounting principles"? So if you're not using "generally accepted accounting principles", then the accounting principles you're using are generally not accepted. So you're using some weird other way of crunching the numbers to massage them into sounding better.
.
Best to have real results that actually do follow GAAP. Those numbers would have to follow certain guidelines of Standard Accounting Practice : Standard accounting practices require publicly traded companies to follow certain accounting rules when presenting financial statements so that the readers of the statements can easily compare different companies. Private companies are also often required by banks and shareholders, for example, to present information according to their specified rules. [emphasis from wikipedia article, not my bold-facing here :) ]

So instead of standard practices dictated by SEC rules, they sprinkled some fairy-dust and powdered-unicorn horns and some shredded nauga-hide on their statements and came up with a magical "with better-than-expected (non-GAAP) earnings of $420 million, or 38 cents per share". La-de-da-di-do! Magic. Get back to me with some real numbers like you're supposed to do as a publicly traded company. Isn't this somehow against SEC regulations? Jus' wonderin'...

Re:non-GAAP may mean just made up numbers, eh?

[khallow]

You know that crazy person that occasionally uses your Slashdot account? Cut their fingers off. When I read these rational and interesting posts, my head explodes. It's hard to clean from the ceiling; I have to grow a new head; and the natives find it disconcerting.
br. When I saw the phrase "non-GAAP" I knew it was bullshit. It's not that hard to do GAAP accounting. It's not that hard to lie using GAAP accounting. So when someone can't be bothered to do it, that's a huge red flag for me. Not that I'd sink a cent into Yahoo even with GAAP.

Except that does not seem to be the case

[tuppe666]

If you scan through the Income statement, and look through its operating expenses the big change is a decrease in "Traffic Acquisition Cost" which explains most of the decrease in expenses about 80% of it (and the decrease in revenue too). It looks like they cut back on deals that were costing more than the revenue they were getting (or focuses on more profitable traffic etc).

Yahoo: The Re-Animator of Companies

[Nova Express]

It buys other companies to graft onto itself to give its corpse the semblance of life...

Re:no contribution

[noh8rz10]

I used to read yahoo news a lot, but got turned off by the comments. Truly nasty base comments. also, the "contributors network", which is just bloggers, would get some clickbait article to rise into the top ten column on the left "10 reasons why Sarah Palin will/won't be our next president." Lastly is the blurred line between journalism, bloggism, and just promotionalism.

now I read NYT for a bit at the beginning of the month before hitting the paywall, then google reader.

Re:no contribution

[asmkm22]

Their news section is a joke. Their highlighted news is nothing but crap about reality television, celebrity culture, and video recaps about other videos. If you see a story about, say, a video that went viral, you have to watch a video just to see clips of the video in question (not to mention sit through ads first) while listening to not-quite-funny commentary by the video host. You're better off just looking the video up yourself.

And the sports section? Just go look up "Chris Chase Yahoo" to get an idea of their in-house journalism capabilities. They finally fired him, but his legacy lives on through other poorly-written articles about weird or just plain boring stuff. The articles that are fairly decent, are usually just AP reprints. To their credit, however, there has been an increase in certain essay-style articles that show up by respected industry journalists now and then, so I'll give props for that.

The "best" part of their news, though, is the comment section. It's like 90% of the people who read and post there are right-wing Fox News types.

So no, I can't say I'd consider Yahoo! news to be all that great.

Non-GAAP numbers

[Hadlock]

Hey guys, I did my own non-GAAP numbers for my income, and I made a net profit of $23 billion dollars last year! And I can prove it, I used Enron's old accountants to do it!
 
Non-GAAP means nothing. GAAP stands for Generally Accepted Accounting Principals. You're only allowed to report taxes/earnings etc using GAAP. Using GAAP means you followed the rules, and conversely non-GAAP quite literally means you ignored all of the rules and made up your own. Really.
 
To put it another way, GAAP is to professional accountants as ITEF's RFC is to networking engineers.
 
Always ignore non-GAAP numbers, because it's how marketing drones convince dumb journalists (or worse, Slashdot editors) to publish fake, reverse FUD.
 
  http://en.wikipedia.org/wiki/Generally_accepted_accounting_principles
 
Always wait for the quarterly earnings report, THAT is required by law to use GAAP.

Re:news for nerds?

[micheas]

What time since ~2000 has Yahoo been a relevant technology company? </troll>

As recently as 2010 I used YUI a fair bit.

Improving Flickr could probably help revenue

[Y-Crate]

But that would entail making improvements.

I haven't seen any since 2006.

Re:news for nerds?

[MrEricSir]

What time since ~2000 has Yahoo been a relevant technology company?

That's actually a good question. I tend to see Yahoo more as a holding company than an R&D company, much like IAC/InterActive (owner of Ask.com, Vimeo, OKCupid, etc.) Seems to me the problem is with expectations; investors want Yahoo to be Google, but that's fundamentally not who they are, were, or ever will be.

In context of this article

[tuppe666]

Hey guys, I did my own non-GAAP numbers for my income, and I made a net profit of $23 billion dollars last year! And I can prove it, I used Enron's old accountants to do it!

To quote "Non-GAAP Net earnings is defined as Net earnings excluding certain gains, losses, expenses, and their related tax effects, that we do not believe are indicative of our ongoing results and further adjusted to exclude stock based compensation expense and its related tax effects.

Non-GAAP Operating income is defined as Income from operations excluding certain gains, losses, and expenses that we do not believe are indicative of our ongoing operating results and further adjusted to exclude stock based compensation expense.

Non-GAAP Total operating expenses is defined as GAAP Total operating expenses excluding TAC and certain other expenses that we do not believe are indicative of our ongoing operating expenses and further adjusted to exclude stock - based compensation expense" http://files.shareholder.com/downloads/YHOO/2426873689x0x653799/c2ef68a1-49db-4bad-8e44-1f4f75bc81d4/YHOO_Q113EarningsPresentationFINAL.pdf

It is what it says it is; a way of *comparing* like with like around the core business. Is Motorola's restructuring costs a sensible way of measuring Googles search business? How about nokia selling off its HQ anything to so with its smartphones? How about Microsoft paying of the EU routine thing?

If you are looking at performance measures...you compare like for like otherwise its simply stupid, which is why unusual of non-business relates expenses/income should be ignored.

Terry Semel and broadcast.com

[bayankaran]

Yahoo went dead the moment they appointed a clueless Hollywood hack Terry Semel as CEO. He should not be hired to run even a grocery store. Then they acquired broadcast.com (I still don't know what the hell that website/service performed) which made a few insiders insanely rich. The new acquisition of the news reading app by Marissa Mayer shows the old culture is still intact. Jerry Yang and David Filo are overrated...they are not Sergey Brin or Larry Page.

(Generally people are aware of public sector corruption, but private sector all over the world is equally corrupt.)

Marissa Mayer made a huge miscalculation by taking the Yahoo CEO position. This is like Sarah Palin running against Obama. Palin is clever. Marissa Mayer is not.

Re:no contribution

[hairyfeet]

Actually many of their services are quite nice, Mail, News, and Games are all very nice IMHO. Ironically I've seen their messenger usage go up at the shop as all the old Live Messenger users when given a choice of being forced into MSFT's new "Skype/OfficeMail" or whatever the hell they are calling it end up switching to Yahoo Mail and Messenger. Hell I talked to my dad tonight when I got one of those automated "Hey I've got a Yahoo Mail!" emails and asked WTH and got a 30 minute "&*&^%*^% MSFT &^^@##$ Piece of shit #$%#%$#%" bitch fest and that man had been on Hotmail and Windows Messenger since the days of fricking geocities.

So I think its ironic that Ballmer didn't buy anything but Yahoo Search as it seems Yahoo is gonna end up getting a LOT of former loyal MSFT users. I mean you have NO idea how many times i have sat there in the shop saying "No sir, I can't make your Hotmail work. because I didn't build it, you'll have to talk to MSFT as they are pulling the plug, no its not your PC, its on there end...yes if you bring it in I can set up Yahoo Messenger and show you how to use it, no I can't make Hotmail the way it was" and so on.

so I'm really not surprised to see Yahoo gaining, there is a LOT of folks out there that are SERIOUSLY PISSED at MSFT right now but they just don't like the Google way of doing things, can't say as i blame 'em as I like the Yahoo layout over Gmail, but there is a LOT of people that were loyal as hell to MSFT that are jumping ship. I honestly never thought I'd see the day as some of these folks have been on Hotmail and Messenger since they started, but that is what happens when you give your customers the finger, they go somewhere else.