Yahoo! (YHOO) Q4 2009 Results

Company Exceeds Revenue Business Outlook, Demonstrates Improvements in Search and Display Advertising

SUNNYVALE, Calif. -- Yahoo! Inc. (NASDAQ:YHOO) today reported results for the fourth quarter and full year ended December 31, 2009.

“We’re intensely focused on improving execution in all areas of the company, and our solid financial results for the fourth quarter demonstrate the progress we're making”

Revenues were $1,732 million for the fourth quarter of 2009, which exceeded the top end of the Company’s business outlook range. Revenues decreased 4 percent from the fourth quarter of 2008 and increased 10 percent from the third quarter of 2009. Excluding the impact of currency rate fluctuations and divested business lines, revenues for the fourth quarter of 2009 would have declined 5 percent compared to the fourth quarter of 2008. Revenues were $6,460 million for 2009, a decrease of 10 percent compared to 2008. Excluding the impact of currency rate fluctuations and divested business lines, revenues for 2009 would have declined 6 percent compared to 2008.

Income from operations for the fourth quarter of 2009 was $119 million, compared to a loss of $278 million in the fourth quarter of 2008. Income from operations for the fourth quarter of 2009 included $40 million in restructuring charges and $32 million in advisory and retention costs related to the Microsoft search agreement, which amounts were not included in the Company’s business outlook for the fourth quarter of 2009.

Net income per diluted share for the fourth quarter of 2009 was $0.11, including charges of $0.04 per share related to the Microsoft search agreement and restructuring charges. For fourth quarter of 2008, net loss per diluted share was $0.22, including a charge of $0.39 per share primarily related to a goodwill impairment.

Non-GAAP net income per diluted share for the fourth quarter of 2009 was $0.15, compared to $0.21 for the fourth quarter of 2008. Net income per diluted share for 2009 was $0.42, compared to $0.29 for 2008. Non-GAAP net income per diluted share for 2009 was $0.63 compared to $0.70 for 2008.

“The fourth quarter marked a strong finish to 2009, which was a transformative year for Yahoo!,” said Yahoo! Chief Executive Officer Carol Bartz. “We beat the high end of our revenue guidance, saw demand for premium display advertising improve significantly, and grew Owned & Operated search advertising revenue sequentially for the first time since the third quarter of 2008.

“Our business has positive momentum and we feel good as we head into 2010,” said Bartz. “We're pleased that the midpoint of our Q1 revenue outlook marks the first quarter of year-over-year growth in six quarters.”

Business Highlights

* Owned & Operated display advertising revenue grew 26 percent compared to the third quarter of 2009 – compared to a 16 percent increase during the same period in 2008.
* Owned & Operated search advertising revenue continued to stabilize, increasing 4 percent compared to the third quarter of 2009, the first sequential increase since the third quarter of 2008.
* Yahoo! finalized its Search and Advertising Services and Sales Agreement with Microsoft Corporation, and is still hopeful that the transaction can close early this year.
* Yahoo! formed a strategic partnership with Emmy- and Golden Globe-winning producer Ben Silverman’s newly formed content studio Electus, an operating business of IAC/InterActiveCorp. The partnership will produce original programming for Yahoo! users while providing advertisers new opportunities to integrate their brand messages into the next generation of online programming.
* The Company launched Yahoo! Ad Interest Manager, which takes transparency in online advertising to a new level—providing significantly greater control over users’ interactions with interest-based advertising to improve personal relevance and build trust.

Source: Yahoo! Inc. (NASDAQ:YHOO)