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October 23, 2012

Mayer sees modest growth in first quarter as Yahoo CEO

Former Google exec outlines strategy and says focus is on mobile

By Steve Evans

Marissa Mayer’s first full quarter as Yahoo CEO saw the company beat Wall Street estimates with a modest increase in revenue.

Revenue for the third quarter came in at $1.09bn, up slightly on the $1.07bn recorded during the same period last year. Profit at Yahoo surged from $298m a year ago to $3.2bn this quarter. That figure was boosted by the recent sale of Yahoo’s shares in Chinese search engine Alibaba. Without that boost, net income would have fallen to $177m.

Revenue from its search operations rose 11% during the quarter while display ad revenue remained flat.

Mayer, who took over in July 2012, used the results as a chance to further outline her strategy for the former internet giant. She said there would be no "giant pivot", meaning Yahoo is unlikely to make a sudden change of direction and focus on an entirely new area.

Mayer did say that mobile would be a key part of the company’s fortunes over the next few years. After admitting that Yahoo needs to hire more mobile engineers, she told analysts and reporters: "It is clear that at some point in the future Yahoo! will have to be a predominantly mobile company. We haven’t capitalised on the mobile opportunity."

Mayer added that Yahoo currently has over 70 different mobile apps available across the iOS and Android app stores, which has resulted in a "splintering" of the brand. She said one priority is to produce a more "coherent" mobile strategy.

Since taking over in July Mayer has wasted no time in stamping her authority on the company with a series of top level hires. Former Google exec Henrique de Castro has joined as COO, while Ken Goldman joined as CFO.

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Mayer joined Yahoo from rival Google, where she spent 13 years in a variety of roles. She was the first female engineer hired by Google and, early on, was heavily involved in work on Google’s user interface, which resulted in the sparse homepage Google still uses to this day. Mayer was also involved in the development of Google Maps and Google Earth.

She is Yahoo’s third CEO in quick succession. She replaced Scott Thompson, who resigned following a controversy over allegations he had falsified qualifications on his CV. Thompson had been brought on board to replace Carol Bartz, who was dismissed in September 2011.

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