Yahoo! suffers ‘body blow’ on back of massive Google results
October 20th, 2006 by Lloyd Gofton
The boardrooms at Google and Yahoo! are two very different places today, and that may offer some insight into why the recent financial results for these companies are so far apart.
For those that didn’t catch Yahoo!’s Q3 results, the figures may come as a surprise. The company posted profits of $155m (£83m), sounds good, but this represents a 38% decline on the $253m Yahoo! recorded in the same period last year.
However, Yahoo!’s figures were really put into perspective last night by Google’s massive Q3 results, which reported $2.69 billion (£1.43 billion) worth of earnings, a massive 70% increase from last year’s Q3 results ($1.58 billion). This was also a 10% increase over Q2 revenues of 2006, which totaled $2.46 billion.
So 70% up v 38% down. There aren’t many positives for Yahoo! on that scale.
Many would say Yahoo!’s results are a reflection of its cautious approach to development and while stock options (Yahoo! did add an $80m charge for the cost of handing out stock options to staff) detracted from Yahoo!’s figure, Google’s considerable market leadership and investments are looking more impressive than ever.
Trip Chowdhry, Global Equities Research analyst, overviewed the situation perfectly in the International Herald Tribune: ”The difference between Google and the second and third place players has become enormous. This definitely shows that Google is going to own the next generation of the computing environment.”
The final words should go to the guys at the top, as you will see, the statements are quite different:
Terry Semel, chief executive, Yahoo!, commented: “I am not satisfied with our current financial performance, and we intend to improve it. We are not exploiting our considerable strengths as well as we should be and we are committed to doing better.”
Eric Schmidt, CEO, Google:“Our third quarter results are a testament to the strength of our network of advertisers and partners, as well as our continuing focus on users. We were particularly pleased with the contributions of our international business in a seasonally weaker quarter. In addition, we continued to forge significant partnerships with companies such as eBay, Fox Interactive Media, and Intuit that will be of great value to all involved.”
Technorati tags: google, yahoo , financial results, financial markets
