Yahoo CEO starts reign with encouraging 3Q report

Associated Press Modified: October 22, 2012 at 6:16 pm •  Published: October 22, 2012
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SAN FRANCISCO (AP) — Yahoo CEO Marissa Mayer turned in an encouraging report card covering her first few months running the troubled Internet company.

The third-quarter results announced Monday weren't astounding, but they were better than analysts anticipated. Most importantly, Yahoo's net revenue crept up from the previous year for the third consecutive year. That reinforced the belief that things are finally getting better at Yahoo after five years of financial malaise, especially with the hard-driving, well-respected Mayer at the helm.

Mayer, 37, underscored her determination to turn around Yahoo by returning to work just a few weeks after having her first baby. Mayer's son was born on Sept. 30, the final day of the third quarter.

Monday's review of the results provided Mayer with her first opportunity to publicly share her vision for Yahoo Inc. The company, which is based in Sunnyvale, Calif., lured Mayer away from rival Google Inc. in mid-July.

Without providing specifics, Mayer said that she plans to ensure that Yahoo's services become a "daily habit" for its 700 million users. Toward that end, she wants to improve Yahoo's search engine and email service and indicated that the home page of the company's website will get a makeover. She also pledged to pour more resources into developing services for smartphones and tablet computers. Bolstering Yahoo's product line-up through acquisitions is also on her agenda, she said, although she emphasized that most of the deals she has in mind would target relatively small startups willing to sell for less than $100 million.

"Our products will change how people learn, share and communicate," Mayer said. "We will inspire, innovate and entertain."

Investors applauded the strides made during the third quarter. Yahoo shares gained 75 cents, or nearly 5 percent, to $16.52 in extended trading. If the shares hit that price in Tuesday's regular session, it will be the highest level that the stock has reached since Mayer's arrival.

Yahoo earned $3.2 billion, or $2.64 per share, during the three months that ended in September. Most of that profit stemmed from a one-time gain of $2.8 billion that Yahoo pocketed by selling half its stake in Alibaba Group, one of China's most successful Internet companies. Yahoo earned $293 million, or 23 cents per share, at the same time last year.

If not for the Alibaba windfall and a restructuring charge, Yahoo said it would have earned 35 cents per share. On that basis, the company easily topped the average earnings estimate of 26 cents per share among analysts surveyed by FactSet.