Yahoo! admitted that it did not have “appropriate coverage” to adjust to the changes in U.S. staffing needs this year, affecting its second quarter revenue significantly. Officials reported lower revenue in three categories of U.S. display revenue in its earnings call today, noting that the numbers were about 5 percent less profitable than the second quarter of 2010.
The earnings were announced at a tricky time for Yahoo! as the search engine’s decision to appoint Carol Bartz as CEO is once again under fire, and many find this move of Yahoo!’s (News 
- Alert) to be a large reason for its less-than-aggressive growth.
“We’re packaging our offerings differently. Perhaps the most important thing is that the new approach to sales is beginning to improve itself. These changes are part of the evolution of our turnaround efforts. We’re intensely focused on monetizing our sites with intense solutions for advertisers,” stated Carol Bartz (News - Alert), CEO, Yahoo! on the earnings call.
Net earnings rolled in at 18 cents per share which matched analysts' estimates as polled by Thomson Reuters. The company had sales of $1.08 billion, just below estimates of $1.1 billion, and attributed the decline in sales to its changes made to its staffing needs in the U.S.
Search revenue turned out to be weaker as well, having fallen 15 percent over the year to $371 million, but on the bright side, the earnings per share number increased 18 percent year over year with income from operations increasing by 9 percent.
Bartz continued, “We made clear progress in search, and saw strong growth in engagement on our media properties. We experienced softness in display revenue in the second half of the quarter due to comprehensive changes we have made in our sales organization to position ourselves for more rapid display growth in the future."
What has yet to come from Yahoo! is its reaction to the monster of search and social technology that Google has presented. TMC’s (News - Alert) CEO Rich Tehrani noted recently on his blog, “While Yahoo! has slept these past years, Google (News - Alert) has not only caught up to the company by building out a portal strategy from maps to weather to news but it has also launched what seems to be a successful social strategy, Google+ which ties it all together.”
Juliana Kenny graduated from the University of Connecticut with a double degree in English and French. After managing a small company for two years, she joined TMC as a Web Editor for TMCnet. Juliana currently focuses on the call center and CRM industries, but she also writes about cloud telephony and network gear including softswitches.
Edited by Juliana Kenny
