Just a few hours after Yahoo ushered in Marissa Mayer as its new CEO on Tuesday, the struggling internet company's second-quarter earnings tempered some of the excitement surrounding her hiring.
The results provided a sobering reminder that Mayer is entering a situation dramatically different from what she left behind at Google, where she helped build the internet's dominant search and advertising service during her 13-year tenure.
Instead of pulling the levers on Google's finely tuned moneymaking machine, she will now be running a financial laggard seemingly unable to devise an effective turnaround strategy.
Mayer, 37, becomes the fifth CEO in the past five years to try to salvage Yahoo. Investors hoping to hear about Mayer's plans for Yahoo were disappointed on Tuesday.
She skipped the company's earnings call so she could spend more time meeting with her new management team. Yahoo didn't even provide a forecast on how it might fare in the current quarter.
"We believe it's best to give our new CEO time to get acclimated to Yahoo before providing any future guidance," said the company's chief financial officer, Tim Morse, who ran the conference call.
The second-quarter numbers largely fell in line with the ho-hum performance that investors had anticipated.
As has been the case for the past year, Yahoo's Internet search partnership with Microsoft delivered disappointing returns. And the company's internet ad prices in Europe decreased slightly as government debt woes in several countries on the continent undermined the economy.
Yahoo muddled through its latest quarter under two different CEOs, Scott Thompson and Ross Levinsohn.
After Thompson stepped aside in mid-May amid an uproar over misleading information on his biography, Levinsohn began filling in as interim CEO.
Mayer's hiring marked the second time in less than a year that Yahoo has passed over Levinsohn as a candidate to become full-time CEO. He was also interested in the job after Yahoo fired Carol Bartz last September.
Some analysts are now worried Levinsohn will leave Yahoo, hurting the company's efforts to forge partnerships with other media outlets as it battles internet search leader Google and online social networking leader Facebook for the attention of web surfers and the marketing budgets of advertisers.
If they work together, Levinsohn and Mayer could complement each other's strengths. Levinsohn is seen as a media maven while Mayer specialises in product development and design.
"Our new CEO brings strong tech background, but we also have exceptional and deepening media expertise here as well, so we've got to combine them," Morse told analysts on Tuesday. "It's a powerful combination when we get it right."
Morse didn't mention Levinsohn in his remarks.
Yahoo earned US$227 million ($284 million) for the three months ending in June. That was down 4 per cent from net income of US$237m a year ago. Earnings per share for the quarter remained level at 18 cents.
The company spent US$456m buying back its stock, reducing its outstanding shares from last quarter.
Analysts polled by FactSet had projected earnings of 20 cents per share. The numbers for the latest quarter were dragged down by a US$136m charge for employee layoffs and other cost-cutting measures.
The company, which is based in Sunnyvale, California, trimmed 1500 people from its payroll to end June with 12,500 employees.
Revenue for the period dipped 1 per cent from last year to US$1.22 billion. After taking out ad commissions, Yahoo's net revenue totalled US$1.08b. That figure fell about US$16m shy of analyst estimates.
Yahoo's biggest gains in the quarter flowed from its stakes in Yahoo Japan and China's Alibaba Group.
Yahoo's earnings from those holdings and other investment totalled US$180m, a 65 per cent increase from last year.
Yahoo has already agreed to sell half its 40 per cent stake in Alibaba for about US$7b. Morse said that deal is still on schedule to be completed late this year.
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