By Michael Liedtke, Technology Writer
SAN FRANCISCO (AP) --Unable to revive Yahoo's revenue growth on her own, CEO Marissa Mayer is hoping for a little help from her old friends at Google.
Mayer, a top Google executive until defecting to Yahoo in 2012, announced the two companies had reached a three-year deal to work together in Internet search and advertising. The pact was unveiled after Yahoo released a disappointing report on its third-quarter performance.
The numbers announced Tuesday showed Yahoo's revenue, after paying ad commissions, dropped 8 percent from the same time last year to $1 billion.
It marked the ninth time in the past 11 quarters that Yahoo's net revenue has declined or remained unchanged from the previous year. The ongoing erosion has magnified worries that the Internet company will be stuck in a financial sinkhole after spinning off its lucrative stake in China's Alibaba Group.
Mayer is still promising to boost revenue and now it appears Google – the Internet's most profitable company – may play a key role.
This is Yahoo's second attempt to lean on Google's expertise in Internet search and advertising.
Yahoo Inc. tried to team up with Google Inc. in search during 2008 as part of its defense against a takeover attempt by Microsoft Corp. The Google alliance unraveled after the U.S. Justice Department threatened to block the partnership on the grounds that it would thwart competition.
After being rebuffed, Yahoo wound up negotiating a deal to rely on technology from Microsoft's Bing search engine. Yahoo will still use Bing, but will also mix in results from Google's search engine if it can win antitrust approval of its new deal this year.
It may be easier to gain the government's approval this time because Yahoo's share of the Internet search market has shrunk during the past seven years. Google's search engine, though, still processes about two out of every three search requests in the U.S., roughly the same volume as it did when the Justice Department originally objected to a Yahoo partnership.
While awaiting clearance to team up with Yahoo, Mayer is pledging to trim the company's expenses as revenue declines, and concentrate the remaining workforce on fewer products.
"We see a unique moment and opportunity for Yahoo as we move into 2016 to narrow our strategy and focus on fewer products with higher quality to achieve better growth and better results," Mayer said during a review of the third-quarter results. She promised to elaborate on her plan by the time Yahoo releases its fourth-quarter results in 2016.
Mayer already has been trimming the company's payroll. Yahoo ended September with 10,700 workers, down from 11,000 in June. Yahoo's workforce now has 1,800 fewer people than it did a year ago.
The Sunnyvale, California, company is expecting another tough time in the current quarter ending in December. Revenue, after ad commission, is expected to range from $920 million to $960 million, an 18 to 22 percent decline for the previous year. That would be by far the largest quarterly drop in Yahoo's net revenue since Mayer became CEO in July 2012.
Yahoo's stock dipped 53 cents, or 1.6 percent, to $32.30 in extended trading after the numbers came out.
Investors are now focused on the fate of Yahoo's plan to place its remaining Alibaba holdings – 384 million shares currently worth about $28 billion – into a new company called Aabaco Holdings.
Yahoo is doing the spin-off in an effort to prevent the remaining profits from its $1 billion investment in Alibaba from being taxed in the U.S., but it's now unclear whether that will pan out. The Internal Revenue Service raised doubts by declining to guarantee the spin-off will protect the Alibaba stake from being taxed.
Despite that setback, Yahoo Inc. is still planning to complete the spin-off by next year with the expectation that it will qualify as a tax-free maneuver.
Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research.
“Scandal” cast will reunite for online script reading for hurricane relief in western North Carolina
The cast of ABC's hit political drama "Scandal" may need to brush up on their snappy, speedy delivery known as "Scandal-pace," because they're reuniting for a good cause. Its stars including Kerry Washington, Tony Goldwyn and Bellamy Young will take part in a live virtual script reading on Nov. 17 to raise money for hurricane relief in western North Carolina.
Beginning Friday, fans can go online and donate to reserve a spot for the online reading. Proceeds will benefit United Way of North Carolina. Everyone who donates will be able to take part in a virtual pre-event with the cast and Shonda Rhimes will give an introduction.
Additional guest stars will also be announced. The online fundraising platform Prizeo is also holding a contest where one person who donates online via their site will be selected to read a role from the script with the actors. The winner should not worry about the "Scandal"-pace, assured Young over Zoom.
"Whomever the lucky reader is can read at whatever pace they want," she said.
Young, who played Mellie Young, the first lady and later Republican presidential nominee on "Scandal," was born and raised in Asheville, North Carolina. She came up with the idea for the effort with a friend and took it to her fellow "Scandal" actors, who all jumped on board. Young said this is the first script reading the cast has all done together since the show ended after seven seasons in 2018.
Which episode they will be reading has not been announced yet.
Young said it's "been devastating" to see so many parts of her hometown badly damaged by Hurricane Helene, which ravaged western North Carolina one month ago.
To research the best use for donations, Young spoke with numerous political leaders, including North... Read More