Advert price rises help Yahoo beat profit estimates

Yahoo, the biggest US web portal, reported profit and sales that topped analysts’ estimates, as chief executive Marissa Mayer benefited from a rise in the prices charged for advertisements.

Fourth-quarter earnings, excluding some items, were 32 cents a share, California-based Yahoo said yesterday. Sales, excluding revenue passed to partner sites, increased to $1.22bn. Analysts on average had projected profit of 28 cents on revenue of $1.21bn, according to data compiled by Bloomberg.

Mayer, the fifth CEO in four years, is striving to narrow Yahoo’s gap with Google and Facebook in display advertising, a market that EMarketer Inc predicts will increase to $17.7bn this year. Yahoo has appealed to advertisers by investing more in tools that deliver ad promotions to consumers based on their browsing history, said Kevin Stadtler, president of Stadtler Capital Management LLC.

“They are really well positioned, because they can provide real-time data to advertisers, who can then pinpoint ads to people who are interested in their products,” said Stadtler, who manages $7.2m in assets, including Yahoo shares.

Yahoo stock jumped in late trading after the results were released. The shares had fallen less than 1% to $20.31 at the close in New York, and they’ve climbed 2.1% this year.

Yahoo is working on technology that will personalise content from the web and feed it to people on their mobile devices, Mayer told Bloomberg News last week. User data will make it possible to create a so-called interest graph to show connections among people and create a personalised experience, she said.

“With the web becoming so vast, there’s so much content and there’s so much social context, and now with mobile, there’s so much location context and activity context,” Mayer said. “How do you pull all that together?”

Since Mayer arrived, Yahoo has continued to cede share in its core business of display advertising. Google will retain its lead in the US display-ad market this year with an 18% share, while Facebook will have 15% and Yahoo will slip to 8%, EMarketer estimates.