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Marissa Mayer: Yahoo Will Focus More on Search, Core Products

James Dohnert
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marissa-mayer-hope-posterRecently appointed Yahoo CEO Marissa Mayer has promised to make technology innovation the center of the company's future during Yahoo's third quarter investor call.

The firm's Q3 earnings for 2012 saw the firm report an income of $3.16 billion, although a $2.8 billion chunk of that came from the company's recent sale of its stake in Chinese firm Alibaba.

The sale of the stake means Yahoo now has a cash balance of just under $10 billion, up from $2.5 billion at the start of the year, although it will pay some $2.5 billion in tax on the purchase before the end of 2012.

Ignoring the sales, revenues rose to $1.09 billion up from $1.07 billion during the same period last year.

Mayer pointed to changing the culture at Yahoo and re-emphasised the company's core products as her goals going forward.

"We have a fundamental foundation on which to grow," Mayer said during the call with investors. "We believe Yahoo's best days lie ahead."

Mayer laid down her plans for Yahoo's future and told investors that the company will start to double down on the things that made it successful in the past, like search and mail.

"The core components of Yahoo's business, search, mail, ads, news and homepage, are also the core products that I've built my career on," Mayer said during her call with investors. "I came to Yahoo to grow and help redefine one of the Internet's most beloved companies."

Mayer also highlighted the stabilization of search and display revenue, which increased 11 percent to $414 million (vs. $374 million in Q3 2011) and remained flat at $452 million, respectively.

However, Mayer also noted that Yahoo's search share is challenged and that the search alliance with Microsoft has "fallen below expectations."

Mayer is a former Google high flyer who came to Yahoo last July. While at Google she focused on product engineering.  

Analysts tend to like where Mayer is looking to take Yahoo. Principal analyst at Pund-IT Charles King said that by focusing the company's goals Mayer is setting up Yahoo for a comeback.

"In essence, Marissa Mayer has stabilised the company by focusing on core competencies, eliminating waste, curtailing hopeless operations and tightening spending," King said. "That has improved Yahoo's revenues and profits but, more importantly, it suggests the company is targeting achievable goals rather than pursuing a less-defined, scattershot market approach."

Fellow analyst Rob Enderle of the Enderle Group agreed with King's assessment. Enderle said Mayer has done what her predecessors could not.

"So far I'm impressed. She seems to be sticking to the basics of executing a turnaround better than many of her more experienced peers and predecessors," Enderle said.

Along with her commitment to re-establishing a core group of businesses, Mayer also highlighted her attempts change the culture at Yahoo. During her brief tenure with Yahoo, Mayer has brought on many new staff members she has worked with in the past.

Mayer also recently made the decision to give free smartphones to Yahoo employees. The move made headlines because the offer disallowed employees from using the BlackBerry as their preferred work smartphone.

This article was originally published on V3.


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