After a disappointing third-quarter and year of much-scrutinized management changes, Yahoo CEO Marissa Mayer hinted Tuesday during the company’s earnings call that more shakeups and trimming are to come in 2016.
Third-quarter revenue was reported at $1.23 billion and earnings at 15 cents per share, both results that were lower than expected. Analysts had anticipated $1.26 billion in revenue and earnings of 17 cents per share.
Mayer and Yahoo CFO Ken Goldman spoke throughout the call of increasing the “focus” at Yahoo in 2016. Mayer framed it as an opportunity to simplify the company’s structure and improve expense discipline.
“We see a unique moment and opportunity for Yahoo as we move into 2016 to move into fewer products with higher quality,” said Mayer.
“We will be a more focused company in 2016,” said Goldman. He explained a $42 million write-down by saying the large sums Yahoo invested in premium video content, the canceled NBC sitcom "Community," proved more difficult than expected to monetize.
She assured analysts, “We have the right talent and the right strategy and the right assets to drive long term sustainable growth for our investors.”
The CEO briefly addressed management shuffling at the company. Over the last year, the company has seen the departure of two top ad executives and the head of its digital media projects, and a reshuffling of the company’s leadership team.
Mayer's management of Yahoo has drawn intense criticism over the last year, with one NYU business professor making the inflamatory remark that the CEO would be out of a job were she not pregnant with twins.
Mayer acknowledged on Tuesday that the shifts in management had drawn scrutiny, but insisted they were the results of “careful planning” and said Yahoo’s management team was “unequivocally the strongest” the company had seen in a decade.
Mayer also announced a three-year search advertising partnership with Google slated to go into effect after regulatory review.
Looking ahead, Mayer described projections of Q4 as “not indicative of the performance we want.” But she spoke hopefully about the coming quarter’s spinoff of Yahoo’s holdings in Chinese e-commerce giant Alibaba into Aabaco Holdings. She said the split between Yahoo and Alibaba would be an important event for investors and the history of the company.