By Brandon Bailey, Technology Writer
SAN FRANCISCO (AP) --Yahoo's latest earnings report leaves no doubt the internet company is stuck in a downward spiral.
The company managed to beat Wall Street's limited expectations for revenue in the April-June quarter. But after subtracting commissions paid to its partners, Yahoo said its revenue fell 19 percent from a year earlier, while its loss widened to $440 million.
Yahoo also reported Monday that it's writing down $482 million in charges related to the declining value of Tumblr, the social-blogging service that Yahoo acquired for $1.1 billion in 2013. Combined with an earlier write-down of $230 million, that indicates Tumblr's value has plunged by almost two-thirds.
What remains unclear is whether Yahoo will abort its long-running turnaround attempts and sell its operations in a move that would likely end the four-year reign of CEO Marissa Mayer.
Mayer had little to say about a possible sale on Monday, as she released the latest in a succession of dismal earnings reports. She told investors the company is carefully evaluating bids but added, "We have no announcement today." The Sunnyvale, California, company began soliciting bids five months ago.
A decision may come soon, though. Monday was the deadline for final offers.
The list of prospective buyers includes two telecommunications providers, Verizon Communications and AT&T Inc., which are hoping to broaden their array of digital services. Also in the running is a group led by Quicken Loans founder Dan Gilbert with the backing of billionaire investor Warren Buffett. Several private equity firms that specialize in buying troubled companies are also believed to be in the running.
Investors have been betting a deal will get done, partly because Yahoo recently added a sale proponent, Jeffrey Smith, and three of his allies to its 11-member board. It's the main reason that Yahoo's stock has climbed 14 percent so far this year, even as the company's fortunes have faltered. Yahoo shares rose 22 cents, or half of one percent, in after-hours trading Monday after closing at $37.95.
Analysts have estimated Yahoo will fetch $4 billion to $8 billion for a lineup that includes its email service and popular sections devoted to news, sports and finance. Most analysts expect the offers to come in the middle of the projected range.
Yahoo's recent financial performance is unlikely to drive the bidding upward. In the most telling sign of the company's deterioration, Yahoo's net revenue – after subtracting ad commissions – fell from slightly from more than $1 billion a year ago to $842 million in the latest quarter. That's the steepest decline yet under Mayer.
Mayer has cut spending and staff at the company, which now has about 8,800 employees. But Yahoo's loss widened to $440 million and amounted to 46 cents a share, compared with a loss of $22 million, or 2 cents a share, a year ago. After adjusting for one-time charges, Yahoo said it earned 9 cents a share in the latest quarter- short of the 10 cents that analysts surveyed by FactSet were expecting.
The eroding revenue comes as advertisers have been pouring more money into digital marketing as consumers spend more time living their lives online. Most of the advertising, though, has been flowing to internet search leader Google and social networking leader Facebook Inc.
If Yahoo jettisons its struggling internet operations, it will still retain prized stakes in Yahoo Japan and Chinese e-commerce leader Alibaba Group. Yahoo's investment in Alibaba alone is currently worth $32 billion, before taxes.
Avid completes acquisition of Wolftech
Avid®, known for software solutions for professional media production, has completed the acquisition of Wolftech Broadcast Solutions, a leader in cloud-based multiplatform news planning, production and publishing solutions.
The acquisition enables Avid to combine its digital-first, end-to-end media solution with Wolftech’s expertise in story-centric workflow management. News organizations will be able to increase efficiency and accelerate story delivery through enhanced remote collaboration and multiplatform amplification.
Avid CEO Wellford Dillard stated, “Wolftech is unquestionably on the leading edge of where the industry is going, and this acquisition demonstrates Avid’s commitment to transform news, sports, and live production workflows. We are delighted to welcome Wolftech into the Avid family.”
Wolftech CEO Arne Berven added, “We were focused on finding a partner that could accelerate the adoption of our platform globally. We explored a number of possibilities, but when we talked to Avid, we knew it was the right match.”
The closing of the acquisition follows Avid’s announcement on October 7 that the company had entered into a definitive agreement to acquire Wolftech.
With this acquisition, Avid deepens the integration between the two toolsets while continuing to embrace an open approach in partnering with a wide range of media production tools and newsroom systems. Existing Wolftech customers will benefit from Avid’s global scale for customer support and professional services.
Ian Axton, head of production operations for ITV News, said, “As a customer of both Avid and Wolftech we’re excited about the benefits this acquisition will bring to our users and our business. Wolftech has transformed... Read More