Yahoo Q1 Results Impacted by Microsoft adCenter

Yahoo (NASDAQ:YHOO) is out with its first quarter fiscal 2011 results, showing a decrease in revenues.

Revenues for the first quarter were reported at $1.2 billion, a 24 percent decrease on a year-over-year basis. Net Income was reported at $190 million, for a 1 percent increase over the $188 million reported for the first quarter of 2010.

Yahoo noted that the decline in revenues was primarily due to the required changes in how they have to report revenues based on their Search Agreement with Microsoft.

Yahoo CEO, Carol Bartz, was optimistic during Yahoo’s earnings call despite the revenue decline. Bartz noted that Yahoo’s global users were up 13 percent in Q1 and pageviews on Yahoo’s media properties were up 8 percent. She added that time spent on Yahoo’s properties was up by 17 percent.

Yahoo has also experienced a growth in pageviews across its’ U.S. news blogs. Bartz reported that in Q1, Yahoo’s U.S. news blogs did more than 400 million pageviews. She noted that the news blogs pageviews have increased by more than 50 percent over the last three months.

“The operating momentum we’ve been building continues as we modernize our technology platform, driving engagements through enriched content, introducing well-received new products and leveraging innovations in digital advertising to boost display revenue growth,” Bartz said. “Overall, our turnaround is proceeding on schedule, and we are very confident Yahoo is heading in the right direction.”

That said, Bartz admitted that the Yahoo Search marketplace is encountering some issues that are related to Microsoft adCenter technology.

“Advertisers are seeing strong ROI, but technical limitations in the current adCenter platform mean the click volumes just aren’t there yet,” Bartz said.

Bartz added that Yahoo is working very close with Microsoft on the adCenter issues.

“They understand the issues and they’re hard at work on systems architecture, science models and better features and functions in adCenter,” Bartz said. “They have an aggressive roadmap to bring those to the marketplace.”

Sean Michael Kerner is a senior editor at, the news service of, the network for technology professionals.

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