Yahoo! Q4: the turnaround begins

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It looks like the Mayer effect is taking hold at Yahoo! Its Q4 results (this is the first full quarter since Mayer took over) showed solid revenue growth at the embattled tech giant, beating analyst expectations.

The company recorded US$1.22-billion in revenue during the quarter up two percent on the same quarter a year ago. Its yearly revenue meanwhile was US$4.4-billion, a significant turnaround for Yahoo!

“I’m proud of Yahoo!’s 2012 and fourth quarter results. In 2012, Yahoo! exhibited revenue growth for the first time in four years, with revenue up two percent year-over-year,” said Mayer.

While things seem to generally be on the up, there were a couple of dark spots in the report. One, the shutting down of its South Korean business, which saw its fourth quarter earnings fall eight percent. That’s a temporary blimp though, and things should be back on track in the next quarter.

Slightly more concerning is the three percent year on year decline in its display revenue. That says Yahoo! is down to the fact that the number of adverts sold on its “properties decreased approximately 10% compared to the fourth quarter of 2011 and increased approximately three percent compared to the third quarter of 2012″.

That slight bump from the third quarter is easy enough to explain when you take the usual increase in holiday spending into account. Yahoo! will however be hoping that it can reverse the downward trend given that display advertising is one of its key revenue sources.

Its other major money spinner, search, is doing much better. Search revenue was up four percent year on year. Paid clicks, or the number of clicks on sponsored listings on the company’s various online properties and affiliated sites, meanwhile increased approximately 11% compared to the fourth quarter of 2011 and increased approximately eight percent compared to the third quarter of 2012.

Right now, it’s too early to tell just how much of an impact Mayer will have on Yahoo!’s financial fortunes. Her focus on mobile and personalised content makes definite sense and the redesigned Flickr and Yahoo! Mail (together with their respective apps) are stunning.

Everything points to a CEO who knows exactly what she’s doing, but if the money doesn’t start rolling in how long will it be before Mayer joins the long line of CEOs to have gone through Yahoo!’s revolving door?

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