CEO Marissa Mayer offered no information on the massive hacking of 500 million accounts.
Does it matter that Yahoo management declined to have the usual conference call with investors after it announced its third quarter earnings today?
Well, yes, because it means everyone is getting zero information from CEO Marissa Mayer about what gives with the massive hacking of 500 million accounts it suffered last year.
That includes Verizon, which is supposed to pay close to $5 billion for the Silicon Valley Internet giant’s core business and which is also waiting for some actual data about the data breach. The incursion caused Verizon’s top lawyer to say publicly last week that the situation opened up the deal to renegotiation.
Before that happens, the telecom giant will need a lot of questions answered before it closes, such as: What data did the hackers get from consumers? Were their previous breaches? Was the corporate email of Yahoo also compromised?
And, most importantly, what did Mayer know and when did she know it?
For now, it’s anyone’s guess. But here’s one thing for sure: As it sunsets as an independent company, Yahoo’s business continues to contract.
Analysts had expected the company to report earnings of 14 cents per share, excluding certain expenses, compared to 15 cents in the same period a year ago. Instead, Yahoo reported earnings of 20 cents.
Wow, right? Well, no. While it looks like a big beat, this result is primarily due to cost cuts and not massive growth in its businesses. Adjusted EBITDA, which is real measure of performance, was down to $229.2 million from $244.2 million. (Kudos to CFO Ken Goldman for making it look better than it is at Yahoo via cost cuts and creative accounting!)
While revenue in its mobile, video, native businesses rose, the big moneymakers declined as advertisers fled and traffic declined. Display ad revenue was down seven percent and search revenue was down 14 percent.
Revenue was expected to rise to $1.3 billion, which is close to seven percent higher than last year, except when payments to partners is added in. Then it was expected to fall to $862 million, a 14 percent decline. Instead, it was even lower at $857.7 million.
Now we are in a wait-and-see period while Yahoo investigates itself — that always turns out so well — and Verizon tries to assess the damage. There are also shareholder lawsuits to make a complicated situation even more thorny and even national security issues (as it the Russians? The Chinese?).
In other words, Yahoo’s sale limps forward, which is in keeping with how it’s ben going for years now. At least, it’s consistent, although I will miss the Mayer-Goldman quarterly earnings show, which seems to have closed without one final performance.