Yahoo! Reports Q1: Display Up, Right Media Exchange Discussed

YahooThough Yahoo! reported declining revenues of $1.06 billion from a year ago (-6%), the company still met Wall Street expectations earning $190 million for the quarter. Read the earnings release (PDF). And, get the slides (PDF).

The company went on to say that revenue is continuing to take a hit from the search partnership with Microsoft which seems to have encountered a few glitches. In the display world in Q1 2011, things were rosier as, “Display revenue ex-TAC (less Traffic Acquisition Costs) increased 10 percent to $471 million, compared to $427 million for the first quarter of 2010,” according to the release. (The “high end of Yahoo!’s guidance to Wall Street previously.”) CEO Carol Bartz said display would grow in “the mid-teens” in the second quarter and she also made reference to APT as well as Right Media’s Predict product which she said contributed to display momentum. This was the first mention of RMX on a Yahoo! earnings call in memory.

And then came Ken Sena from Evercore Partners.

His question was about Right Media Exchange as he asked Yahoo! execs, “Given increased competition with Microsoft’s investment in AppNexus and Google’s further integration of Invite, how satisfied is Yahoo! with the current investment level and capabilities of Right Media right now? And if you could just maybe give some examples of modernization and innovation there, that would be great. Thanks.” Nice one.

Carol Bartz: “We’ll talk about this in May, too, (Yahoo!’s Investor Day), but impressions are up in Right Media, RPM is up. We’re really adding more science to the product because we’ve been cleaning it up as well. We have better prediction, better analysis and inventory management. A lot of the things that we are doing for APT now flow nicely to the exchange.”

Tim Morse, CFO: “So, we’re very happy level with the level of investment. In one feature alone, among the many that Carol just noted, it was responsible for RPM’s going up 2% in the quarter.”

Carol Bartz: “2% worldwide – that’s a nice number- in the exchange.

Was this the “audience sharing” feature? It will be interesting to see if Yahoo! wants to shed any more light on the financial workings of RMX at Yahoo!’s Investor Day in May.

Listen to the entire webcast here.

By John Ebbert

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