Yahoo’s Best Ad Growth in Years Comes With Costs

Revenue up 15 percent in Q2

Marissa Mayer reported Yahoo's best revenue growth in nearly a decade, but the company is spending a lot of money and actually took a loss, overall.

Yahoo announced second-quarter results today and showed strong search and mobile, video, native and social advertising numbers. (Mayer calls those Mavens.)

"I'm extremely pleased with our achievements in Q2, with revenue growing 15 percent year-over-year, marking our most substantial GAAP revenue growth in almost 9 years," Mayer said in the earnings statement today. "Our Mavens investment businesses across mobile, video, native and social grew to nearly $400 million in revenue this quarter, delivering 60 percent GAAP growth year-over-year. Further, our display business saw the most substantial revenue growth since 2010. Yahoo's transformation continues to make great progress."

Yahoo's total revenue was $1.24 billion, up from $1.08 billion at this time last year. Losses jumped to $22 million—compare that with last year, when there was a profit of $270 million in the second quarter.

Here is a look at the most important numbers:

  • Mobile, video, native and social ad revenue was up 60 percent over last year to $400 million.
  • Display revenue hit $500 million, price per ad increased 10 percent, and number of ads sold rose 9 percent.
  • Search revenue of $521 million represented an increase of 22 percent.
  • Yahoo spent $200 million on traffic acquisition, up from $4 million last year.
  • Revenue is expected stay relatively flat next quarter at up to $1.27 billion with even higher costs.