Bloomberg News

Yahoo Gives More Detail on Revenue Composition After SEC Inquiry

December 10, 2013

Yahoo! Inc. (YHOO:US) agreed to disclose more details on its revenue tied to search and display advertising after the U.S. Securities and Exchange Commission sent letters to the company asking for clarification.

The company outlined the portion of revenue it gets from a search agreement with Microsoft Corp. (MSFT:US), following inquires stretching back several months, according to new regulatory filings (YHOO:US) that were made public yesterday. Yahoo, which had previously said the deal comprised more than 10 percent of sales, said the pact generated 31 percent of revenue in the latest quarter.

The data underscores Yahoo’s reliance on the search alliance, which was forged in 2009. Microsoft, which competes with Google Inc. (GOOG:US) in online search, shares revenue from Internet advertising with Yahoo. The Web portal also said it would break out quarterly sales for search and display-based ads for its own properties and from promotions tied to partner sites.

“Since the company and its management are in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made,” Patrick Gilmore, accounting branch chief at the SEC, wrote in a letter to Yahoo Chief Executive Officer Marissa Mayer on April 26, according to a filing.

Yahoo’s revenue is under scrutiny from investors as Mayer, who was hired from Google last year, seeks to drive a turnaround to bolster growth. Yahoo said in October that fourth-quarter sales, excluding revenue passed to partner sites, would be $1.18 billion to $1.22 billion, short of analysts’ average estimate for $1.25 billion.

Sarah Meron, a spokeswoman for Yahoo, declined to comment on the filings.

Yahoo also began disclosing more risks to its business after the SEC asked about its growth numbers. The company made the changes earlier this year.

-- Editors: Reed Stevenson, Stephen West

To contact the reporter on this story: Brian Womack in San Francisco at bwomack1@bloomberg.net;

To contact the editor responsible for this story: Pui-Wing Tam at ptam13@bloomberg.net


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Companies Mentioned

  • YHOO
    (Yahoo! Inc)
    • $33.28 USD
    • -0.05
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  • MSFT
    (Microsoft Corp)
    • $44.84 USD
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