In an earnings call with analysts and media, CEO Terry Semel, the former entertainment executive hired three months ago to succeed Tim Koogle, confirmed that Yahoo would ramp up its efforts to shed its dependence on advertising. He said the company is working to ensure that each of its business segments--communications, entertainment, financial services, and commerce--achieves a better balance of advertising, services, and E-commerce activity. "There is no single event that will transform this company," Semel said. "What you'll see is a series of actions, and you'll begin to see them unfold this quarter."
Yankee Group analyst Rob Lancaster says Yahoo's efforts to diversify its revenue streams aren't likely to yield measurable results for some time. "They're going to need to continue in that direction for the next four or five quarters and let Terry Semel take effect," says Lancaster. He expects to see Yahoo roll out new subscription services wrapped around multimedia content, enhance its financial-services offerings, and possibly launch new services related to instant messaging.
For the quarter ended June 30, Yahoo reported a pro forma profit of $8.7 million, 1 cent per diluted share, on revenue of $182.2 million, compared with a pro forma profit of $69.1 million, 11 cents, on revenue of $273.0 million in the year-ago quarter. Including one-time charges, Yahoo posted a loss of $48.5 million, 9 cents per diluted share, compared with the profit of $53.3 million, 9 cents, it reported in the same quarter last year. CFO Susan Decker says the company expects the traditional summer slowdown to result in third-quarter revenue of $160 million to $180 million, with year-end revenue between $700 million and $775 million.