Yahoo! CEO Marissa Mayer revealed during the company’s latest earnings call that Tumblr’s ad sales could reach an estimated $100 million by next year, according to Adweek. This is in response to critics who had questioned Mayer’s move in acquiring Tumblr. Mayer defended the move by stating, “We’ve come really far, really fast” in reference to Tumblr.
Still, the real bright spot for Yahoo! is the fact that the company has finally exhibited growth, albeit a meager 1 percent rise to $1.15 billion in the third quarter to beat analysts’ estimates. Yahoo’s overall quarterly revenue has not increased over the previous year’s mark since the fourth quarter of 2012, so this reversal is a welcome event for investors.
Yahoo! pointed out also that revenues from mobile exceeded $200 million, to show how the company is making progress on this all-important area. Also important is Yahoo!’s progress with search ads, as the company revealed its search advertising is now outpacing its display ads. Revenue from search advertising grew for the third straight quarter, this time by 4 percent year-over-year to $452 million. The click-throughs haven’t increased, but Yahoo! has managed to boost the fees paid by advertisers by 17 percent more on average for each of those clicks.
Display ads continue to be in decline for Yahoo!, with revenue falling 5 percent year-over-year to $447 million in the third quarter. The average price advertisers paid for a display ad dropped by 24 percent even though Yahoo sold 24 percent more banners than it did a year ago.
Still, Yahoo! is in good shape, especially with its $6.3 billion in Alibaba shares boosting the company’s cash reserves. Mayer sees the company’s moves as continuing in the right direction, and she is bullish on Tumblr. Tumblr will generate big numbers, according to Mayer. “More than 260 of the world’s top brands have a Tumblr presence,” she explained.