Yahoo, Apple post contrasting figures

22 July 2009

SUNNYVALE, California: Yahoo registered a decline in search and display ad revenues in the last quarter, but Apple remained resistant to the pressures of the downturn, as sales of the iPhone continued to increase.

Yahoo saw search revenues decline by 15% in Q2, with display sales also decreasing by 14%, as total revenues fell from $1.8 billion (€1.3bn; £1.1bn) to $1.57bn year-on-year.

Its profits actually increased from $131.2m to $141.1m over the same period, largely boosted by a cost-cutting programme implemented by its recently-appointed ceo, Carol Bartz.

Bartz said it was "too early to call" if the online ad market had begun to stabilise, but added that the company's "search volume is holding fine."

As such, the drop in search spending was said to be attributable to "fewer click-throughs and fewer buyer intents" on behalf of Yahoo's users, but there is now "less fear in the marketplace" on the part of advertisers, its chief executive said.

Bartz also praised Microsoft for the launch of Bing, its new search engine, arguing the company had "done a good job" and "should be given kudos."

Sales of Apple's iPhone increased more than seven times year-on-year in the last quarter, to 5.2 million, generating revenues of $1.69bn, surpassing the total posted by its iPod music player.

The consumer electronics giant enjoyed the uptick in iPhone revenues despite the fact it halved the price of the most basic device available in the US to $99.

While shipments of its Mac computers rose by 4%, to 2.6 million, revenues from this area of its operations fell by 8%, to $3.3bn, as Apple reduced prices on some models.

Shipments of the iPod also fell by 7%, to 10.2 million, and Peter Oppenheimer, its cfo, said the sales of "traditional" players would continue to "decline over time as we cannibalise ourselves with the iPod Touch and the iPhone."

Overall, the Cupertino-based firm recorded profits of $1.23bn for the quarter ending in June, up from $1.07bn the previous year, with revenues growing by 12%, to $8.34bn, in the same period.

Data sourced from Wall Street Journal/Financial Times; additional content by WARC staff