Yahoo (YHOO) Q1 Conference Call Highlights; Improving Customer Experience, Globalizing Operations

April 22, 2009 5:26 PM EDT

Yahoo (Nasdaq: YHOO) traded up 0.70% today after announcing Q1 results last night. Yahoo! reported Q1 earnings of $0.15, ex-items, or $0.08 unadjusted versus the analyst estimate of $0.08. Revenue for the quarter was ex-TAC were $1.156 billion, versus the consensus of $1.2 billion.

Below are Yahoo conference call highlights:

• Yahoo is focusing on having a Wow! experience for all of its users around the world.
  
• Working on globalizing platforms so can innovate more quickly.
  
• Yahoo is looking to better monetize its user base.
  
• Combining the product and engineering team into a single global organization.
  
• Reducing head count by approximately 5%.
  
• Cost reductions helped Yahoo come in near the upper end of its operating cash flow range.
  
• Economy affected revenues in Q1, but user engagements and volume numbers remained strong in key audience products.
  
• Worldwide owned and operated search revenue declined 3% to $399 million. U.S. owned and operated search revenue grew 3%, with query volume showing strong growth at 11%. Revenue per search or RPS, however, declined due to softness in click yields.
  
• Commercial queries and the corresponding click-through rates have decreased, which Yahoo believes has been due to weak consumer purchase intent.
  
• Consumer products, technology, entertainment and surprisingly the auto sector continue to show strong growth. However, this was offset by modest declines in travel, retail and weakness in financial categories including credit cards and mortgages.
  
• Yahoo's international search revenue was down 29%, though only 12% on a constant-currency basis.
  
• YHOO's traffic acquisition cost was 27% of total GAAP revenue.
  
• Q1 operating cash flow was $409 million, which was near the top end of its guidance range.
  
• Yahoo ended the quarter with 13,500 employees, down slightly from Q4 head count level.
  
• Yahoo ended the quarter with $3.7 billion of cash and marketable securities.
  
• The market value of Yahoo's interests in Yahoo! Japan, Alibaba.com and Gmarket (Nasdaq: GMKT) was $6.8 billion or approximately $5 a share. These figures do not include the estimates of the value of Alibaba Group's privately held businesses.
  
• When Yahoo's CEO, Carol Bartz was asked about streamlining operations this is what she said about Yahoo's product people and engineers. "So when I say product people, we sort of had one product management person for every three engineers. So we had a lot of people running around telling engineers what to do, but nobody fucking doing anything. And so - excuse me; I knew that would slip out one of these times. So, the point of matter is: first, we're getting all the engineers like on the same page. We're getting rid of a lot of those product people that - whatever, and sizing engine by engine, how close are we - and by the way to understand this, while we're reengineering let's say the sports engine to be global, we have to keep the sports platforms around the world running. So we have kind of an overlap issue here."

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