Yahoo! Inc, owner of the second-most popular US Internet search engine, reported sales that missed analysts' estimates as marketers devoted online ad spending to rival sites. The shares fell in late trading.
Excluding revenue passed on to partner sites, Yahoo had sales of $US1.13 billion, the Sunnyvale, California-based company said today in a statement. That compares with the average estimate of $US1.16 billion among analysts surveyed by Bloomberg.
Yahoo is grappling with competition from companies such as Google and Facebook, which have benefited from gains in market share and user growth. Visitor time spent on Yahoo fell to 2 hours and 11 minutes in June from 2 hours and 56 minutes in December, according to Nielsen Co. in New York.
"What they need are people staying up late, spending time on Yahoo," said Heath Terry, an analyst at FBR Capital Markets Corp in New York, who rates Yahoo shares "underperform". "From all the numbers that we see, that's just not happening."
Yahoo fell 4.3 per cent to $US14.55 in after-hours trading, after rising 10 US cents to $US15.20 at 4pm New York time on the Nasdaq Stock Market. The shares have dropped 9.4 per cent this year.
Second-quarter net income attributable to Yahoo rose to $US213.3 million, or 15 US cents a share, from $US141.4 million, or 10 US cents, a year earlier.
Sales Forecast
The company forecast revenue of $US1.57 billion to $US1.65 billion for the current quarter, compared with the $US1.64 billion estimate of Aaron Kessler, an analyst at ThinkEquity LLC in San Francisco.
In the second quarter, search-based advertising sales declined 8 per cent from a year earlier, after a 14 per cent slide in the January-March period. Display ad revenue, including banner ads, rose 19 per cent in the second quarter.
US online advertising is rebounding. The market should expand 11 per cent this year after declining 3.4 per cent last year, according to EMarketer in New York. Last week, Google reported a 24 per cent increase in second-quarter revenue, which is derived mostly from online ads.
Yahoo is bringing new content to its site to attract visitors and keep pace with rivals. The company's US user base rose 10 per cent in June from a year earlier, while Google's climbed 14 per cent and Facebook's increased 84 per cent, according to ComScore in Reston, Virginia.