Mayer: Mobile Is 'Top Priority' For Yahoo

Profits rise but revenue flat as Marissa Mayer presides over first earnings call and lays out management priorities

By George Winslow -- Broadcasting & Cable, 10/22/2012 8:38:36 PM

In the first quarter since Marissa Mayer joined the company as CEO, Yahoo reported dramatically improved profits, thanks to a large asset sale. But revenue for the third quarter of 2012 fell 1% to $1.2 billion and income from operations fell 14% to $152 million from a year earlier.

While the stagnant earnings and declining operating profits highlighted some of the challenges facing Yahoo in its struggle to regain momentum as a major Internet company, shares were up 4.57% in early after-hours trading to $16.49 at 5 p.m. PT.

Earnings per share grew to $2.64 and profits hit $3.2 billion thanks to a net gain of $2.8 billion from the sale of shares in the Chinese internet company Alibaba.

The earning call marked the first time that Mayer had presided over an earnings call and the former Google executive used the event to outline in general terms her strategic plans for the company.

During her presentation, Mayer highlighted the importance of search, improved products to drive usage, the need to attract top engineering talent, their plans to modernize Yahoo mail and the importance of mobile.

"Mobile represents not only a daily habit, but a fundamental and massive platform shift, a platform shift that we have to ride and participate in, in order to be relevant," she argued. "Today, there are more than 1 billion smartphone users globally. As expected, that will double in the next 3 years. And while we've made progress, Yahoo hasn't capitalized on the mobile opportunity. We haven't effectively optimized our website, we've underinvested in our mobile front-end development and we've splintered our brands. We have more than 76 applications across Android and iOS."

"All of this needs to change," she added. "Our top priority is a focused, coherent, mobile strategy. We're accelerating our efforts to build a strong technical talent base for mobile. This includes engineers, product managers and designers."

Also during the call, Mayer highlighted their efforts to strengthen their management team, with the appointment of Henrique de Castro as chief operating officer; Ken Goldman as chief financial officer; Ron Bell as general counsel; Jacqueline Reses as executive vice president of people and development; and Kathy Savitt as chief marketing officer.