Yahoo! Inc. report 28 percent earnings slide and “flat” growth as revenue sharing with Microsoft hits bottom line.
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Total revenue excluding "traffic acquisition costs" was $1,064 m for the first quarter, a 6 percent drop compared to last year, which it attributed the "revenue share search agreement" it has with Microsoft.<br><br>Net earnings dropped a dramatic 28 per cent from $310m to $223m for Q1 2011. <br><br>Revenue growth was for the first quarter of 2011 was "flat" it said in a statement today. <br><br>Microsoft retains 12 percent of the net search revenue generated on Yahoo! Pproperties and affiliate sites, an agreement which kicked in last October, designed to cut operating costs. <br><br>However, display revenue after traffic costs, which refers to marketing costs paid to partners, did increase 10 percent to $471m, although its search revenue fell 19 percent to $357m. <br><br>Other factors attributing to the falling revenue figures included "the impact of the divestitures of Zimbra and HotJobs and certain fee rate reductions."<br><br>Income from operations increased by 1 percent to $190m, a jump of $2m from the same period a year ago. <br><br>Net earnings were $0.17 per diluted share, down from $0.17 y-o-y. <br><br>However, in spite of the flat figures, the search giant remains confident, calling itself "the world's premier digital media company" despite the market domination Google has over the market. <br><br>"We are solidly executing toward our plan for returning Yahoo! to sustainable revenue and profit growth," said Carol Bartz, CEO of Yahoo!. <br><br><div class="NFBreak" style=page-break-before:always contenteditable="false"> </div>It also beat the midpoint of revenue guidance while delivering on the bottom line, it said today.<br><br>"We continued to extend our lead as the world's premier digital media company with users to Yahoo! branded properties increasing 15 percent year over year and minutes spent increasing 17percent."<br><br>However, the company enjoys considerable success in Australia, operating as Yahoo!7, in a joint venture between the Seven network and Yahoo, which reported profits of $22m and revenue of $91.5m last year. <br><br>