Yahoo profit surges on Alibaba divestment, mobile

Yahoo said Tuesday its quarterly profit surged with its sale of shares in Chinese Internet powerhouse Alibaba, and also saw improving results from its mobile Internet initiatives.

By:AFP
| Updated on: Oct 22 2014, 15:35 IST

Yahoo said Tuesday its quarterly profit surged with its sale of shares in Chinese Internet powerhouse Alibaba, and also saw improving results from its mobile Internet initiatives.

Net profit jumped to $6.8 billion, which included $6.3 billion from its Alibaba shares. But profits excluding one-time items were stronger than expected, and pumped up Yahoo shares by 2.7% in after-hours trade.

You may be interested in

MobilesTablets Laptops
27% OFF
Samsung Galaxy S23 Ultra 5G
  • Green
  • 12 GB RAM
  • 256 GB Storage
Google Pixel 8 Pro
  • Obsidian
  • 12 GB RAM
  • 128 GB Storage
Vivo X100 Pro 5G
  • Asteroid Black
  • 16 GB RAM
  • 512 GB Storage
Apple iPhone 15 Plus
  • Black
  • 6 GB RAM
  • 128 GB Storage

Revenue from operations inched up a percent to $1.15 billion, according to third quarter results welcomed by chief executive Marissa Mayer, who is under pressure to show the company can flourish apart from its lucrative investment in Alibaba.

Also read
Looking for a smartphone? To check mobile finder click here.

'We had a good, solid third quarter,' Mayer said in a release.

'We achieved this revenue growth through strong growth in our new areas of investment - mobile, social, native and video - despite industry headwinds in some of our large, legacy businesses.'

More than $200 million in revenue came from mobile devices, with gross revenue from ads served up on devices such as smartphones or tablet computers is projected to bring in more than $1.2 billion for Yahoo this year, according to Mayer.

'We have invested deeply in mobile and we are seeing those investments pay off,' Mayer said.

'Not only are our mobile products attracting praise and engagement from users and industry awards, they are generating meaningful revenue for Yahoo.'

Making money from Internet users accessing websites or services online using mobile devices is seen as crucial for Internet firms as lifestyles increasingly center on smartphones or tablets.

Mayer was expected to use an earnings conference call on Tuesday to lay out how she planned to use money pumped into Yahoo's coffers from its early investment in Alibaba, and to address pressure from an activist investment firm's Yahoo to explore a tie-up with online rival AOL.

Starboard Value LP, which said it had acquired a 'significant' ownership interest in the company, said last month in an open letter to Mayer that bringing together the two early Internet giants could lead to 'up to $1 billion of synergies' and lift the value of Yahoo as it divests a large portion of its stake in Chinese online group Alibaba.

Silicon Valley-based Yahoo acknowledged it received the letter from Starboard and said that it intends to act in best interests of the company.

Starboard's move came amid intense scrutiny over Yahoo, which like AOL is pushing heavily in digital media as part of reorganization efforts.

Starboard said that the value of Yahoo's core business as measured by its share price is virtually nil, when excluding the valuation of its holdings in Alibaba and Yahoo Japan.

Starboard's analysis said Yahoo's Alibaba stake is worth $34 billion and its holdings in Yahoo Japan valued at $7.8 billion.

Starboard said Yahoo should end its 'aggressive acquisition strategy' which has spent some $1.3 billion, cut costs and find ways to get value from its overseas holdings with minimal tax consequences.

Yahoo said its cash on hand has now jumped to over $12 billion, but that it will pay some $3.3 billion in taxes on the gains from its Alibaba holdings.

Catch all the Latest Tech News, Mobile News, Laptop News, Gaming news, Wearables News , How To News, also keep up with us on Whatsapp channel,Twitter, Facebook, Google News, and Instagram. For our latest videos, subscribe to our YouTube channel.

First Published Date: 22 Oct, 15:33 IST
NEXT ARTICLE BEGINS