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Yahoo! Introduces New Ad Format

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Sep. 22 2015, Published 1:53 p.m. ET

Advertisement technology

In 2Q15, Yahoo! (YHOO) announced availability of independent viewability and fraud management for display as well as video advertising across the company’s programmatic buying platform, including Yahoo! properties.

The company’s earnings release stated, “Advertisers can now choose from leading accredited, third-party measurement solutions to independently validate for viewability and fraud across display and video at every stage of the campaign lifecycle.”

Yahoo! introduced new formats to help advertisers reach target customers through native video and video app install ads. Brand content can now be as captivating as video ads.

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Mobile and search revenue

Mobile revenue contributed 16% of traffic-driven revenue in 2Q14, whereas it increased to 22% in 2Q15. Gross mobile revenue for 2Q15 was $415 million compared to $272 million in 2Q14.

Gross search revenue was $521 million in 2Q15 and increased 15% YoY (year-over-year). TAC (targeted amortization class) paid to search partners was $106 million in 2Q15 compared to $1 million in 2Q14. Paid clicks and price-per-click increased 13% and 4%, respectively, YoY for Yahoo!. Compared to Facebook (FB) and Google (GOOG), Yahoo! is a long way behind in terms of mobile revenue and search revenue.

TAC paid to display partners was $94 million in 2Q15 compared to $42 million in 2Q14. While the number of ads sold increased 9% YoY, the price per ad increased 10% YoY in 2Q15.

Cash, cash equivalents, and marketable securities

Cash, cash equivalents, and marketable securities at the end of 2Q15 were $7 billion compared to $10.2 billion as of December 31, 2014. That’s a decrease of $3.2 billion. In 1Q15, Yahoo! paid the $3.3 billion income tax liability related to the sale of Alibaba Group ads in 2014.

CFO (chief financial officer) Ken Goldman said, “In addition to revenue outperformance, we reduced $30 million in sequential cash operating expenses driven by strategic headcount and footprint reductions, tight management of our discretionary costs and the benefit from IP monetization.” Goldman continued, “As we continued to reduce our workforce to fewer than 11,000 full-time employees over the last quarter, we have also continued to realign our resources as we become a more efficient business.”

For a diversified exposure to Yahoo!, you can invest in the SPDR S&P 500 ETF (SPY) and the Technology Select Sector SPDR ETF (XLK). SPY and XLK invest about 0.16% and 0.70% of their holdings, respectively, in Yahoo!.

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