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Yahoo profits rise but sales drop as rivals dent market

July 20, 2011 By: Dr Search Principal Consultant at the Search Clinic Category: Customer Service, Ecommerce, Pay Per Click, search engines, Technology Companies, Uncategorized, Yahoo

Yahoo has reported a drop in its sales revenue for the second quarter due to weaker-than-expected advertising sales.
Yahoo profits rise but sales drop as rivals dent marketThe company said it generated £670 million in revenue in the three months to June, a 4.6% decline compared to the same period last year.

The results have come as Yahoo has been facing increasing competition from rivals Google and Facebook.

However, despite a drop in revenue, Yahoo said its profits rose by 11% from a year ago to £148 million.

Carol Bartz, the chief executive of Yahoo said the second quarter was a “mix of good, encouraging and, at the same time, unsatisfactory” developments.  The issue was we did not have enough sales people in front of the big clients,” she said.

Increased competition from its rivals is the not the only issue that Yahoo has had to deal with.

In May, it suffered a big setback in China after the internet company Alibaba, in which Yahoo has a 43% stake, transferred one its key assets, Alipay, to a company controlled by its founder Jack Ma.

Yahoo shares have fallen more than 20% since then because investors are worried that it may have lost out on one of Alibaba’s key businesses.

The company has assured its backers that it is trying to resolve the issue.

“We have been working on this negotiation continuously, in fact daily,” said Ms Bartz.

However, analysts said the latest data indicated that Yahoo will find it tough to turn things around soon.

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