Higher payments to partners and websites have resulted into slower growth in the Yahoo’s profit. These partners used to send reader to Yahoo and the company has missed Wall Street’s revenue and growth forecasts due to its online advertising business. Chief Executive Officer Marissa Mayer informed press that it is consulting experts to look for most profitable opportunities in the Yahoo Japan. The statement resulted in increase of 1.4% to $45.10 on the stock market. The Yahoo decided to spin off its position in Alibaba Group Holding, a Chinese internet retail giant. Since then investors have been appealing CEO to cash in the stake.
The CEO has failed to deliver robust revenue growth and even couldn’t manage product revamps or acquisitions. The display advertising contributed 40 percent in the Yahoo’s total revenue. As per the latest data for the first quarter the revenue increased around 2.3 percent ($463.7 million). The search business also reported strong revenue growth of 19.5% ($531.7 million.)
The Mozilla’s Firefox browser runs Yahoo as a default search engine after the deal was signed recently. This has resulted in the increased search traffic. Yahoo did not make the value of the deal public but it led to $137 million rise in traffic acquisition costs. This is main reason behind the slower growth of the revenue.
Once an internet giant and a strong player in the domain of internet service, Yahoo has suffered losses due to the Google and Facebook. The company has failed to diversify its product range.