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Yahoo 2Q earnings, revenue fall amid ad slump

By WTOP Staff

BARBARA ORTUTAY
AP Technology Writer

NEW YORK (AP) — Yahoo Inc. said Tuesday that its second-quarter earnings and revenue declined, as the company struggled again with display advertising sales.

Both fell short of Wall Street’s expectations, as did revenue forecast for the current quarter, causing the limping Internet icon’s stock to fall in extended trading.

Before the forecast was revealed during a conference call with analysts, Yahoo’s stock rose as the company announced that Alibaba Group agreed to reduce the number of shares Yahoo is required to sell in the Chinese e-commerce company in an initial public offering of stock this year. Yahoo, which holds a 23 percent stake in Alibaba, now has to sell only 140 million shares in the IPO, down from 208 million earlier.

Although the reduction means that Yahoo’s immediate windfall from the Alibaba IPO will be smaller, it’s also a long-term bet on Alibaba’s success. Analysts say Alibaba’s IPO could be bigger than Facebook’s $16 billion stock debut two years ago, which would make Alibaba the biggest tech IPO ever.

Yahoo earned $270 million, or 26 cents per share, in the March-June quarter. That’s down from $331 million, or 30 cents per share, in the same period a year earlier. Adjusted earnings were 37 cents per share in the latest quarter.

Revenue fell 4 percent to $1.08 billion from $1.14 billion. After subtracting commissions paid to Yahoo’s ad partners, revenue totaled $1.04 million, down 3 percent from $1.07 billion a year ago.

Analysts were expecting adjusted earnings of 39 cents per share and post-commission revenue totaling $1.09 billion, according to Zacks Investment Research.

CEO Marissa Mayer said the company was “not satisfied” by the results.

“(We) saw display revenue decline, further highlighting the fact that we need to work faster to ameliorate the negative trends,” she said in a statement. “I believe we can and will do better moving forward.”

Yahoo has seen its key display advertising sales slump amid competition from No. 1 Google Inc. and No. 2 Facebook Inc. Even Microsoft Corp. is catching up. Research firm eMarketer, which tracks digital advertising, expects Microsoft to surpass Yahoo to take the No. 3 spot in the worldwide digital ad market.

Mayer has been trying to turn Yahoo’s business around, but she has acknowledged that it will take “multiple years.”

For the current quarter, Yahoo expects revenue after ad commissions in the range of $1.02 billion to $1.06 billion. Analysts polled by FactSet were expecting $1.1 billion.

Shares of Yahoo, which is based in Sunnyvale, California, fell 76 cents, or 2.1 percent, to $34.85 in extended trading. The stock had closed at $35.61, down 9 cents for the day and nearly 12 percent since the start of the year. By comparison, the Standard & Poor’s 500 index is up 7 percent this year.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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