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Yahoo Q1: Revenue Beats Expectations, Search Up 8 Percent

A short while ago Yahoo released Q1 earnings, which exceeded financial analysts’ consensus estimates. Total revenue was $1.22 billion, up 1 percent year-over-year (YoY). Net earnings were $286 million, representing 28 percent YoY growth.

Total search revenue was $470 million, up 3 percent vs. last year. Search revenues (ex-TAC) were up 8 percent to $384 million (vs. $357 in Q1 2011). Total display ad revenues were down 2 percent, however, to $511 million.

The search gains came notwithstanding a decline in overall query volume last quarter, according to comScore.

New CEO Scott Thompson said in a blog post, “These results are clearly the right direction for our business and I am very excited about our opportunities ahead. I know we can deliver even more with our new structure, business priorities and clear focus. I am more convinced than ever of the value of our assets and the potential of this business.”

Thompson also announced other positive metrics for the company:

  • Worldwide visitors to Yahoo! properties and branded sites increased 7%
  • Media properties page views increased 10%
  • Minutes spent on communications and communities increased 14% and 8% in media properties

This is a little bit of a gift for Thompson, who will make his first quarterly appearance before financial analysts on the 2pm/5pm earnings call coming up.

Two weeks ago Yahoo announced that it was restructuring and laying off 2,000 employees. Yahoo is retaining search (at least on paper), elevating former Yahoo Search head Shashi Seth to lead “Connections,” one of the company’s three new consumer divisions that includes the search group.

An improving economy has given Yahoo earnings a bit of momentum it appears. However it will be up to Thompson and his executive team to build on that and make sure it continues.

Postscript: According to TechCrunch, Yahoo CEO Thompson seeks to impose some Steve Jobsian product simplification on the company. He said that he would be shuttering as many as 50 properties to generate more focus on core products. The particular sites weren’t identified on the earnings call however.

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