Yahoo financials are nothing to yodel home about

ONE TIME internet search giant Yahoo has released its latest financial statements, showing a decrease in revenues of around a quarter.

Profits were up at the firm, which must have been some good news, however the Yahoo of today, which is a finger on the end of Microsoft's arm, is a mere shadow of its former self and has posted a decline of around 25 per cent of revenue.

GAAP revenue was $1,229m for the second quarter of 2011, a 23 per cent decrease against the comparable quarter last year. Yahoo said that this was "primarily due to the required change in revenue presentation related to the Search Agreement and the associated revenue share with Microsoft", which makes it sound like that deal is going well for at least one party.

Those working in the lower ranks of the Yahoo accounting department might have elected to lead with some of the better figures from the year, and so probably told their bosses that income from operations had increased by nine per cent to £191m in the quarter, before revealing the revenue losses.

Earnings per share, which presumably is the most interesting part of the whole Yahoo operation these days, increased by 18 per cent to a whopping $0.18,

"For the quarter, earnings per share was up by 18 per cent year over year. We made clear progress in search, and saw strong growth in engagement on our media properties," said Carol Bartz, Yahoo CEO.

"We experienced softness in display revenue in the second half of the quarter due to comprehensive changes we have made in our sales organization to position ourselves for more rapid display growth in the future."

There were some things to celebrate during the quarter, such as the fact that the recent Royal wedding gave it a lot of traffic. Another traffic highlight for the firm was the reported death of Osama Bin Laden.

Yahoo also refreshed its Yahoo Mail email application and released some search apps for smartphones, bought a lot of companies and produced some original video programming, which it said includes "'In the Dressing Room' from Cat Deeley, the host of FOX Broadcasting Company's number one dance show 'So You Think You Can Dance' and 'Trending Now'", something that sounds like a total nightmare to us.

In fact, though, it seems like it was a downturn in the display advertising market that most affected the company, and that is where Yahoo is challenged by Google. µ