Yahoo and Google sign advertising cooperation agreement: few business highlights
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BEIJING, Oct. 21 (Xinhua) -- Yahoo! announced Tuesday that it has signed a search advertising cooperation agreement with Google that is expected to help CEO Marissa Mayer boost the company's results. On top of that, the company reported lower-than-expected revenue and profit.
The agreement with Google is based on a search cooperation agreement with Microsoft, under which Yahoo can get a portion of its revenue from ads displayed on its website.
Yahoo shares fell 1.46 percent after Tuesday's trading, and the company said it had agreed to delay the deployment of the deal in the U.S. to allow enough time for the Justice Department's antitrust division to evaluate it.
Yahoo has struggled to boost revenue through sales of ads, under intense competitive pressure from Google and Facebook.
The deal with Google is one of the few bright spots in the company's three-quarter report.
Yahoo said it expected revenue of $1.16 billion to $1.2 billion in the fourth quarter, well below analysts' average estimate of $1.33 billion.
Mr Mayer, who has been Yahoo's CEO for four years, said the forecasts did not reflect the performance we wanted.
"Our core (advertising) business is also experiencing continued revenue headwinds, particularly in terms of heritage." He said in a telephone conversation with analysts.
Yahoo said it could spin off its 15 per cent stake in Alibaba around January. This is also one of the most important concerns of investors.
Yahoo earlier this year wanted the IRS to confirm the tax-exempt status of the deal. Although the IRS rejected the request, Yahoo still believes the company can complete the spin-off by the end of the year.
Many analysts believe Yahoo's core business would be worth little without Asian assets. It's worth noting that Yahoo also owns 35% of Yahoo Japan.
In addition to the deal with Google, the only good news comes from Yahoo's start-up business, what Mayer calls Mavens, mobile, video, native and social advertising.
Advertising in this area rose 43 percent to $422 million in the quarter. Native ads are ads that have a similar style and type to native content.
Excluding certain items, Yahoo's third-quarter earnings per share were $0.15, y way to meet analysts' average estimate of $0.17.
Excluding fees paid to co-ed sites, Yahoo's revenue fell to $1 billion in the quarter from $1.09 billion, and the company expects it to fall to $920 million to $960 million in the current quarter.
In the third quarter, the cost of getting traffic, which Yahoo used to attract users to its website, rose to $223 million from $54 million a year earlier.
GAAP (GAAP) revenue rose 6.8 percent to $1.23 billion, edishing analysts' average estimate of $1.26 billion.
Yahoo's shares have fallen 35 percent so far this year, based on Tuesday's closing price of $32.83.
(Source: Sina Technology)
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