Wednesday, October 19, 2016
Marissa Mayer insists Yahoo's Verizon deal is still on track as core revenue plunges 14% in Q3
Yahoo tried to reassure Wall Street that its $4.8 billion deal to sell itself to Verizon was still on track, despite a massive security breach at the internet company that has thrown the acquisition into question.
Although the struggling internet company provided no details about the hacking incident or on any resulting negotiations with Verizon, CEO Marissa Mayer sought to portray a business-as-usual situation.
"We are busy preparing for integration with Verizon. We remain very confident, not only in the value of our business, but also in the value Yahoo products bring to our users' lives," Mayer said in a statement accompanying the company's third quarter financial results.
Shares of Yahoo were up about 1.5% at $42.29 in after hours trading on Tuesday.
Verizon announced plans to purchase Yahoo for $4.83 billion in July. But two months after the announcement, Yahoo revealed that it had been hacked in 2014 in a massive breach that affected at least 500 million of its users.
Verizon's top lawyer said last week that there was a reasonable basis to believe the breach had a "material" impact on Yahoo's business, which would give Verizon the right to walk away from, or renegotiate, the deal.
Yahoo, which is not holding the customary quarterly conference call with analysts to discuss its latest results, did not comment on whether the incident was material, or provide further comment about the Verizon deal.
But Yahoo served up various pieces of data on Tuesday aimed at making the case that users have not abandoned its various online services in the wake of the damaging hack revelation.
Traffic to Yahoo's various web services have ticked up slightly or remained roughly flat since news of the hack first surfaced, the company showed in its charts:
Yahoo is "heartened" by its users' continued loyalty, Mayer said in a statement.
Still Yahoo's business continues to deteriorate. Revenue, excluding the traffic acquisition costs that Yahoo pays to partner websites, plunged 14 percent from the level one year ago. The number of ads sold and the number of paid clicks on its search engine both declined year-over-year.
Here are some of the key numbers from Yahoo's Q3 results:
EPS (adjusted): 20 cents, vs Wall Street's target of 14 cents
Revenue: $1.305 billion, up 6.4% year-over-year.
Revenue ex TAC: $858 million, down 14% year-over-year.