It’s hard to see how Yahoo (NSDQ: YHOO) could avoid disappointing given a stock price seriously below the amount offered for it by Microsoft (NSDQ: MSFT) earlier this year and the vast number of people with emphatic — and differing — opinions about what the company should do. In this environment, coming in even a percent ahead on revenue could be seen as a plus for some companies. Not so for a company but that’s been asking for patience to right itself for a matter of years now. Yahoo brought in $1.786 billion in revenue, up one percent over the same quarter last year. Excluding traffic acquisition costs, revenue rose 3 percent to $1.35 billion over Q307. Net income was slightly higher than anticipated but it was $123 million, or 9 cents per share, compared with $153 million or 11 cents per share in Q307. On the plus side, it was on the plus side. That may be one reason shares are up nearly 6 percent after hours. Some details.
– Fees: Fees revenue of $224 million was flat compared with the same quarter last year but will start declining now between changes in broadband sales relationships with AT&T (NYSE: T) and Rogers, and the closure of Yahoo’s paid music service. It was up sequentially over Q208′s $211 million.
– Affiliate declines: Affiliate revenue, which has been declining for quarters, dropped 10 percent over Q307 and was down sequentially as well. It’s the second double-digit decrease in the last four quarters. O&O site marketing services revenues were up 9 percent to $1,002 million
– O&O: O&O Search was the strongest area of revenue growth, up 17 percent over Q307 but the lowest growth in seven quarters.
– Staffing: Yahoo has been talking about staff cuts for a long time but the company also increased its staff by 1,400 this year and closed the quarter at 15,200, compared with 13,600 in Q307. The last major cuts in Q1 drew a charge of $29 million pre-tax, but was offset by $12 million in stock-expense reversals.