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Yahoo! (YHOO) Cuts Costs, Makes Money–Market Not Impressed

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By Douglas A. McIntyre Updated Published
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Yahoo! (NASDAQ:YHOO)

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reported revenues of $1.575 billion for the quarter ended September 30, 2009, a decrease of 12%. Net income was $.13, compared to $.04 for the third quarter of 2008.

Marketing services revenue declined 12% and fees revenues declined 11%, compared to the third quarter of 2008. Marketing services revenue from “owned and operated” sites was $851 million, a 15% drop compared to $1 billion for the same period a year ago. The decrease was caused by a 19% decline in search advertising revenue and an 8% drop in display advertising revenue.

Yahoo! was able to sharply cut costs. Excluding a one-time restructuring charge, expenses were$758 million in the third quarter compared to $944 million in the same quarter last year.

Marketing services revenue from “affiliate sites” was $526 million, a 6% drop.

Yahoo! said that going forward revenue for the fourth quarter  is expected to be $1.6 billion to $1.7 billion.  Income from operations is expected to be in the range of $135 million to $155 million.

Cutting costs must not have impressed the market. Shares of Yahoo! were up 3% after hours to $17.68

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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